Platt v. Sodexo, S.A., No. 23-55737, __ F.4th __, 2025 WL 2203415 (9th Cir. Aug. 4, 2025); Avecilla v. Live Nation Entertainment, Inc., No. 23-55725, __ F. App’x __, 2025 WL 2206153 (9th Cir. Aug. 4, 2025) (Before Circuit Judges Friedland and Desai, and District Judge Karen E. Schreier)

In these two cases the Ninth Circuit, like so many circuit courts before it, tackled the interplay between arbitration and ERISA. Both appeals addressed the same issues, and rather than write two nearly identical decisions, the court elected to issue a longer published opinion in Platt while referencing that ruling in a shorter companion memorandum in Avecilla. As a result, in order to simplify things, we’ll limit our analysis to the Platt decision.

The plaintiff was Robert Platt, an employee of Sodexo, Inc., the food services and facilities management company. He filed suit against Sodexo, alleging that its imposition of a monthly tobacco surcharge on his employee health insurance premiums violated ERISA. He brought class action claims under two provisions. First, Platt alleged that the plan violated § 502(a)(3) because it failed to provide a “reasonable alternative standard” for plan participants to avoid paying the surcharge, and did not provide notice of such a standard. Second, Platt asserted a class claim under § 502(a)(1)(B) for violating the plan in implementing the tobacco surcharge. Finally, Platt alleged a breach of fiduciary duty claim under § 502(a)(2) on behalf of the plan.

Sodexo moved to compel arbitration based on a provision that it had unilaterally added to the plan in 2021. The district court denied Sodexo’s motion on two grounds. First, it ruled that the plan did not allow Sodexo to unilaterally add the arbitration provision. Second, it ruled that Platt, who had become a plan participant in 2016, i.e., before the amendment, had never agreed to arbitration. In so ruling the district court dodged other arguments made by Platt, which included that the plan’s arbitration agreement was unenforceable because it violated the effective vindication doctrine and because parts of it were unconscionable. (Your ERISA Watch covered the district court’s ruling in our August 2, 2023 edition.)

Sodexo appealed. The Ninth Circuit agreed with some of the district court’s rulings, and disagreed with others, but the result was largely a win for Platt and his fellow employees.

First, the Ninth Circuit noted that in order to compel arbitration, there must be a valid agreement between the parties in which both sides consent to arbitration. Sodexo argued that consent was unnecessary because ERISA allows plan administrators the freedom to amend plans as they wish, including the addition of arbitration provisions. However, the Ninth Circuit ruled that ERISA does not address arbitration and thus refused to interpret ERISA in a way that would displace ordinary arbitration rules, including the necessity of consent.

Because consent was required, the Ninth Circuit next asked who the relevant consenting parties were. For Platt’s claims under § 502(a)(1)(B) and § 502(a)(3), the court ruled that Platt was the relevant party. After all, Platt had alleged that he and other plan participants had been forced to pay an illegal fee because of the plan’s unlawful tobacco surcharge provision, and thus they had been harmed and were required to give consent to arbitration.

The court further ruled that Platt had not agreed to arbitration. Sodexo contended that because Platt continued participating in the plan after Sodexo added the arbitration provision, Platt had effectively consented to the provision. However, Platt did not recall receiving notice of a 2021 summary of material modifications explaining the amendment, and Sodexo could not produce the email it claimed it had sent to Platt which included a copy of that summary. The best Sodexo could do was produce an email to Platt in 2022 which included a hyperlink to the new summary plan description which included the arbitration provision. However, the provision was buried on page 153 of a 170-page document.

The court ruled that these communications “did not provide sufficient notice of the arbitration provision… It is unreasonable to expect that Platt would notice a new arbitration provision hidden in a lengthy document.” Furthermore, “the 2022 email contained no express language that Sodexo was adding the new arbitration provision or that his continued participation in the Plan constituted consent or agreement to the new provision.” Even if Sodexo’s communications had been satisfactory, the court ruled there still was insufficient notice to establish consent. There was no evidence that Platt had given “some indication of assent to the contract.” As a result, “the arbitration provision is unenforceable as to his § 502(a)(1)(B) and § 502(a)(3) claims.”

The court’s analysis differed when it came to Platt’s § 502(a)(2) claim, however. On that claim, the court concluded that the plan was the relevant consenting party, not Platt. This was because Platt brought this claim in a representative capacity on behalf of the plan. In his claim he sought redress on behalf of the plan for losses the plan incurred from Sodexo’s alleged fiduciary breaches and for profits that Sodexo improperly obtained using plan assets. The court easily found that the plan had consented to arbitration: “Because the terms of the Plan expressly cede broad authority to Sodexo to amend its terms, a reasonable person would believe that the Plan consented to the arbitration provision that was added by Sodexo.”

However, Sodexo was not out of the woods. Platt argued that even if the plan consented to the arbitration provision, it was still invalid under the effective vindication doctrine. The court agreed. The Ninth Circuit noted that § 502(a)(2) authorizes plan participants to bring actions for relief on behalf of the plan. However, the plan’s arbitration provision contained a representative action waiver “which expressly precludes Platt from bringing claims in a representative capacity on the Plan’s behalf.” Because this provision precluded Platt from obtaining plan-wide relief explicitly authorized by ERISA, it prevented him from “effectively vindicating” his rights under ERISA, and thus it was unenforceable. The Ninth Circuit added that this conclusion was consistent with the decisions of other circuit courts which had applied the effective vindication doctrine. (For further background on the doctrine, feel free to read Your ERISA Watch’s analyses of similar decisions from the Sixth, Seventh, and Tenth Circuits.)

The Ninth Circuit also ruled that Platt’s unconscionability arguments were viable. Sodexo contended that those arguments were rooted in California state law, and thus could not be used in an ERISA case, which of course is governed by federal law. However, the Ninth Circuit agreed with Platt that his unconscionability arguments were federal in nature. After all, the Federal Arbitration Act allows “generally applicable contract defenses, such as fraud, duress, or unconscionability” to invalidate arbitration agreements. Thus, Platt was free to allege such defenses under federal common law, “borrowing from state law where appropriate, and guided by the policies expressed in ERISA and other federal labor laws.” The court did not opine as to whether any of the provisions identified by Platt were unconscionable or not, or whether the unlawful representative action waiver could be severed from the rest of the arbitration provision, leaving that to the district court for further consideration.

As a result, the Ninth Circuit concluded that (a) “no arbitration agreement exists between Platt and Sodexo for the ERISA § 502(a)(1)(B) and § 502(a)(3) claims because Platt did not consent to arbitration,” (b) “a valid arbitration agreement may exist between the Plan and Sodexo for the ERISA § 502(a)(2) claim because the Plan consented,” (c) “Platt may raise unconscionability defenses to arbitration under federal common law,” and (d) “the representative action waiver in the arbitration agreement violates the effective vindication doctrine.” Having affirmed in part and reversed in part, the Ninth Circuit thus remanded the case to the district court to sort out the issues with its new instructions.

Below is a summary of this past week’s notable ERISA decisions by subject matter and jurisdiction.

Attorneys’ Fees

First Circuit

Jackson v. New England Biolabs, Inc., No. 23-12208-RGS, 2025 WL 2256261 (D. Mass. Aug. 7, 2025) (Judge Richard G. Stearns). Plaintiffs Melissa Jackson and Marta Meda filed this class action against New England Biolabs, Inc. and the other fiduciaries of the company’s employee stock ownership plan, alleging that defendants violated ERISA in the valuation of the company’s stock and through a 2019 amendment that set new methods for establishing the price paid for New England Biolabs stock which allegedly did not reflect the stock’s fair market value. On April 3, 2024, the court “dismissed the claims challenging the 2019 amendment and allowed the claims challenging the valuation to proceed.” The court then directed the parties to begin mediation. In April of 2025, the parties reached a formal settlement agreement, agreeing to a settlement fund worth $7,150,000. The court preliminarily approved the terms of the settlement and scheduled a fairness hearing for August 6, 2025. Before the court here was plaintiffs’ motion for attorneys’ fees, costs, expenses, and service awards to the two class representatives. In this order the court granted the fee motion, but awarded fees that were lower than what plaintiffs requested. The court tackled the motion for attorneys’ fees first. Plaintiffs’ counsel sought an award of attorneys’ fees equivalent to 25% of the settlement fund, approximately $1,787,500. The court determined that “a fee of 20% of the settlement fund [i]s a reasonable percentage, translating into an award of $1,430,000.” The court took time to recognize the complexity of this litigation and the substantial benefit counsel achieved for the class. It also stated that it wished to encourage efforts to bring cases to a prompt and just conclusion through successful mediation. Nevertheless, the court determined that there were certain factors present which offset these positives, including its dismissal of the claims relating to the 2019 amendment and the fact that no formal discovery took place. It concluded these factors warranted a slight downward adjustment of the fee request, hence the decision to adjust the common-fund award down to 20%. The court then assessed plaintiffs’ request for reimbursement of $17,445.31 in litigation expenses and $5,356 in settlement administration expenses. The court awarded these requested amounts in full, as it found them reasonable and appropriately documented. Finally, the court discussed the motion for class representative service awards. Ms. Jackson and Ms. Meda requested service award payments of $20,000 each. The court awarded them $15,000 each instead. It applauded plaintiffs for the risks they undertook bringing this action and for the time and effort they each spent representing the class. However, the court found that because neither sat for a deposition or participated in any formal discovery, a slight downward adjustment was appropriate, and more in line with other awards granted in the First Circuit. For these reasons, the court granted plaintiffs’ motion for attorneys’ fees, expenses, and class representative service awards, but not in the full amounts plaintiffs had hoped for.

Breach of Fiduciary Duty

Ninth Circuit

Wit v. United Behavioral Health, No. 14-cv-02346-JCS, 2025 WL 2227681 (N.D. Cal. Aug. 5, 2025) (Magistrate Judge Joseph C. Spero). Readers of Your ERISA Watch, even casual ones, are likely at least somewhat familiar with this long-running class action alleging that United Behavioral Health violated ERISA through its design and implementation of its own internal mental health guidelines that plaintiffs claim were unreasonable and inconsistent with generally accepted standards of medical care. For those of you who aren’t familiar with this case, suffice it to say that both sides have had their victories and defeats over the past 11 years. Indeed, both sides experienced some success and some failure in this most recent decision too, which was issued on remand following the Ninth Circuit’s fourth ruling in this matter. As the district court presented it, there were two issues to address on remand: (1) identifying any surviving aspect of the breach of fiduciary duty claim that was not based on the district court’s erroneous interpretations of the plans, and (2) assuming some part of the fiduciary breach claim survives, answering the threshold question of whether the fiduciary duty claim is subject to the exhaustion requirement. The parties each presented their own “all-or-nothing positions” on these two issues. Plaintiffs asserted that the court had not relied on any misinterpretation of the plan in support of its judgment on the breach of fiduciary duty claim, and therefore the claim survives the Ninth Circuit’s decision in its entirety. Plaintiffs also argued that exhaustion is not required for fiduciary breach claims. United Behavioral Health asserted that the fiduciary breach claim is essentially identical to the denial of benefits claims and thus the court is required to enter judgment in its favor on the claim. Further, United Behavioral Health argued that plaintiffs were required to exhaust administrative remedies before bringing their fiduciary breach claim. The court found that both sides’ positions on the question of what exactly survives of the fiduciary breach claim “deviate from the Panel’s holdings in Wit III and Wit IV.” The court stressed that while it had “no doubt that the Panel reversed [its] judgment on the breach of fiduciary duty as to at least some portion of that claim,” it was nevertheless unpersuaded by United’s argument that it was required to enter judgment in its favor on the whole of the claim. It noted that the panel could have adopted United Behavioral Health’s position in Wit III and Wit IV and instructed the court to enter judgment on the fiduciary breach claim, as it did with to the denial of benefits claim, but it did not do so. Thus, the court was left to parse what exactly of the fiduciary breach claim survived. It found its answer by splitting the claim into two distinct types of breach of fiduciary duty: a breach claim based on the application of the guidelines to the class members’ claims and a breach of the duty of loyalty and care based on the separate conduct of adopting the guidelines in the first place, which was done in order to serve its own financial self-interest. The court additionally clarified that it had recognized in its summary judgment order that plaintiffs “satisfied the harm element of their breach of fiduciary duty claim based on two kinds of harm: ‘the denial of their rights to Guidelines that were developed for their benefit and to a fair adjudication of their claims.’” Reading the Ninth Circuit’s decisions closely, the court came to the conclusion that “because the breach of fiduciary duty claim based on failure to adhere to plan terms implicates the application of the Guidelines to class members’ individual claims for benefits, that portion of the breach of fiduciary duty claim is intertwined with the error that the Panel found required reversal as to the denial of benefits claim. Therefore, the Court finds that the judgment it entered on the breach of fiduciary duty claim has been reversed with respect to the alleged breach based on failure to adhere to plan terms. On the other hand, the Court’s findings as to the breach of the duty of care and the duty of loyalty are not intertwined with the erroneous interpretation of the Plans identified by the Panel and therefore, the Court’s judgment on the breach of fiduciary duty claim survives to the extent that it is based on those theories.” The court then discussed whether the fiduciary duty claim is subject to the exhaustion requirement. It agreed with plaintiffs that it is not. The court stated, “Plaintiffs’ breach of fiduciary duty claim is based on ‘willful and systematic’ conduct, namely, adoption of Guidelines – ostensibly to implement the plans’ common [generally accepted standards of care] precondition – that were overly restrictive and put profits before the interests of plan beneficiaries. This conduct affected plan beneficiaries across-the-board and violated statutory requirements of ERISA, namely, the duties of loyalty and care under 29 U.S.C. §§ 29 USC § 1104(a)(1)(A) & (B).” Based on this understanding, the court found that the portion of the fiduciary breach claim that survived Wit III and Wit IV is a statutory claim for breach of fiduciary duty under ERISA, and not a disguised claim for benefits that would be subject to exhaustion. In the alternative, the court also concluded that the exhaustion of the surviving portion of the breach of fiduciary duty claim is excused based on its finding of futility. It wrote, “exhaustion would have been futile because [defendant’s] administrative appeal process required that the same Guidelines be applied to the appeal as were used to deny benefits. In other words, Plaintiffs who pursued administrative remedies under the plan would not have been able to challenge the conduct upon which the breach of the duties of loyalty and care are based, namely, [United Behavioral Health’s] adoption of Guidelines based on its own financial interest and not solely in the interest of plan participants.” For these reasons, although neither party came out entirely victorious here, plaintiffs at least maintain their fiduciary breach claim in some form and no longer have the issue of exhaustion hanging over their heads. The decision concluded with the court ordering the parties to meet and confer regarding next steps in this case. Thus, while we observers might be at our wits’ end with this case, Wit itself is still not at an end.

Tenth Circuit

Middleton v. Amentum Parent Holdings, LLC, No. 23-CV-2456-EFM-BGS, 2025 WL 2229959 (D. Kan. Aug. 5, 2025) (Judge Eric F. Melgren). Plaintiffs Jay Middleton and George A. Lawrence bring this putative class action on behalf of themselves, a proposed class, and the Amentum 401(k) Retirement Plan and the DynCorp International Savings Plan alleging that the fiduciaries of the two retirement plans have breached their duties of prudence, loyalty, and monitoring, engaged in prohibited transactions, and violated ERISA’s anti-inurement provision. Plaintiffs’ allegations fall into two categories: one addressing the use of forfeited employer contributions, and the other pertaining to the selection and retention of costly and poorly performing investment options. Defendants moved to dismiss, asserting plaintiffs failed to state a claim. In this decision the court dismissed the forfeiture claims, but basically let the investment claims proceed. Contrary to defendants’ arguments, the court found that for the most part the complaint plausibly alleges “that Defendants (1) failed to utilize the lowest-cost share class versions of several of the funds offered by the Plan; (2) failed to replace certain T. Rowe Price mutual funds with substantially identical, but much less expensive, collective investment trust (‘CIT’) versions of the same funds; (3) selected and retained high-cost, single asset investment options that were more expensive than substantially similar alternative options; and (4) failed to replace index funds with less expensive versions of funds that track the same index.” The court was mostly satisfied that plaintiffs compared the challenged investment options to benchmarks that were similar in terms of investment strategy, design, and risk. The one exception to this holding involved the actively managed funds versus the passively managed funds. The court agreed with defendants that “actively managed funds cannot be meaningfully compared to the passively managed funds because they are fundamentally different.” Accordingly, the court granted the motion to dismiss this small subset of investment claims, but otherwise concluded that the claim was adequate. The forfeiture causes of action were a different story. The court rejected these claims across the board. Although it determined that plaintiffs were alleging fiduciary acts relating to the use of the forfeited funds, it nevertheless concluded that the use of the forfeitures satisfies ERISA’s fiduciary mandates, plaintiffs cannot create a new benefit for themselves out of thin air, and the claims “flout established law.” The court accordingly dismissed the fiduciary breach claims as they relate to the use of the forfeited contributions. As for the prohibited transaction claims, the court found that using the forfeited funds as a substitute for future employer contributions could not constitute a prohibited transaction because the funds remained in the plan, the plans remained funded, and the plan participants suffered no harm. Finally, the court brushed aside the notion that the defendants benefitted from their chosen use of the forfeitures, stressing instead that the participants continued to receive the benefits. The allegations plaintiffs made in their complaint, the court found, therefore could not state a claim that defendants violated ERISA’s anti-inurement provision. For these reasons, the court dismissed all claims relating to the defendants’ use of forfeitures. Finally, the court denied plaintiffs’ request for leave to amend their complaint, stating they did not “indicate how they would remedy any deficiencies and instead appear to seek an advisory ruling by the Court as to the shortcomings in their allegations.” Thus, as explained above, defendants’ motion to dismiss was granted in part and denied in part, and plaintiffs were left with their investment claims only.

Discovery

Third Circuit

Choi v. Unum Life Ins. Co. of Am., No. 24-06338-JKS-AME, 2025 WL 2234903 (D.N.J. Aug. 6, 2025) (Magistrate Judge Andre M. Espinosa). Plaintiff Katie Choi filed this action under Section 502(a)(1)(B) of ERISA to challenge Unum Life Insurance Company of America’s decision to terminate her long-term disability benefits in the summer of 2023. Before the court here was Ms. Choi’s motion to compel discovery wherein she sought broad production relating to Unum’s conflict of interest in the handling of her disability claim. “Among other things, the discovery requests seek to explore Unum’s compensation and performance evaluations of those benefits specialists, directors, and other individuals involved in her LTD benefits claim review; financial metrics, recovery and claim closing targets, and other claims administration data Unum maintains; and information concerning the file-reviewing physicians’ other work for Unum, in particular, their record of involvement with claims that are denied. Plaintiff also wishes to depose the Unum disability benefit specialist who denied her claim for LTD benefits, the director who oversaw that denial, and Dr. Greenstein.” The court was antagonistic to Ms. Choi’s discovery requests. She asserted that there was reasonable suspicion of Unum’s misconduct in the handling of her claim because Unum has a long and persistent history of biased claims administration, employs systems designed to promote its financial goals over fair evaluation of claims, and has an established pattern of exclusively relying on the opinions of its retained physicians. The court rejected each of these contentions in turn. To begin, the court held that Ms. Choi’s reliance on Unum’s longstanding practice of administering claims in an improper manner fell short of demonstrating that there was misconduct specifically in the administration of her claim. Moreover, the court conveyed that it viewed her “conclusions about persistent and systemic misconduct [as] wildly speculative” and “insufficient to permit conflict of interest discovery.” Similarly, the court rejected Ms. Choi’s claim that Unum maintains denial targets and improperly prioritizes profits by encouraging claims denials. Rather, the court saw Unum’s tracking of claims resolution data as unremarkable given its business model. And again, the court stressed that Ms. Choi could not concretely tie these accusations of misconduct to the denial of her own claim. Finally, the court considered Ms. Choi’s assertion that Unum employs a company-wide practice of deciding claims by exclusively relying on the opinions of the medical professionals it hires. The court noted that this argument was rooted in the administrative record of Ms. Choi’s claim, but stated that “the trouble with permitting discovery based on Plaintiff’s critique of the soundness of Dr. Greenstein’s report is that it appears to go to the merits of her ERISA claim, not to any alleged bias or conflict of interest that impacted Unum’s denial of Plaintiff’s claim for LTD benefits.” In sum, the court stressed that opening extra-record discovery in ERISA cases should be done only in very limited circumstances, and here Ms. Choi could not persuasively link some indication of bias or misconduct to the adverse outcome of her claim in a manner that justified granting her discovery requests. Accordingly, the court denied Ms. Choi’s motion to compel discovery.

ERISA Preemption

Sixth Circuit

Laurel Hill Management Services, Inc. v. La-Z-Boy Inc., No. 24-13230, 2025 WL 2231041 (E.D. Mich. Aug. 4, 2025) (Judge David M. Lawson). Plaintiffs are several medical providers that sued La-Z Boy, Inc. in California state court after La-Z Boy’s self-funded ERISA health benefit plan paid less than $1,600 toward their submitted claims totaling more than $342,000 for medical services they provided to a patient who was a beneficiary of the plan. As detailed in their complaint, plaintiffs allege that during pre-service communications with plan representatives they were assured that after the patient paid a $1,100 deductible, services would be covered at the usual and customary rate. Plaintiffs maintain that the amount they were paid came nowhere near usual and customary reimbursement rates. As a result, they initiated legal proceedings in state court asserting claims of negligent misrepresentation and promissory estoppel. Defendant removed the case to federal court on the ground that the state law claims are preempted by ERISA. The case was subsequently transferred to the Eastern District of Michigan. La-Z Boy then filed a motion to dismiss the state law claims, arguing they are expressly preempted by Section 514(a) of ERISA. Because the court agreed that the claims relate to La-Z Boy’s ERISA-governed welfare plan, the court granted the motion to dismiss and dismissed the action with prejudice. The court took note of the fact that the Sixth Circuit has repeatedly held that negligent representation, promissory estoppel, and breach of contract claims based on allegedly underpaid or unpaid benefits “are ‘at the very heart of issues within the scope of ERISA’s exclusive regulation,’ thus warranting preemption.” In essence, the court concluded that the providers’ claims that they were misled about the amounts and rates of payments they could expect for the medical care they provided to the beneficiary necessarily related to the medical benefit plan because “defendant could have no other obligation to pay for the cost of medical care for the employee otherwise.” The providers’ state law claims, the court found, come at the very heart of issues exclusively within the scope of ERISA and are therefore clearly preempted. In particular, the court noted that plaintiffs fail to allege the existence of any standalone agreement “but rather focus their grievance on the rate and method of calculating payment under the plan.” Accordingly, based on the allegations in the complaint, the court was left with “the inescapable conclusion” that plaintiffs’ causes of action conflict with ERISA, relate to the ERISA plan, and are preempted by ERISA. The court therefore ordered that the complaint be dismissed with prejudice.

Life Insurance & AD&D Benefit Claims

Second Circuit

Daus v. Janover LLC Cafeteria Plan, No. 19-CV-6341, 2025 WL 2229929; Daus v. Janover LLC Cafeteria Plan, No. 19-CV-6341, 2025 WL 2229928 (E.D.N.Y. Aug. 5, 2025) (Judge Frederic Block). Plaintiff Paul Daus has been a public accountant since 1996. From 2011 until 2016 Mr. Daus worked for Janover, LLC as a senior tax manager. He lost that position after he became disabled from a medical condition and was terminated. Following his termination from Janover Mr. Daus filed a charge with the Equal Employment Opportunity Commission (“EEOC”) alleging disability discrimination and retaliation by his employer. On January 9, 2018, Mr. Daus, along with his counsel, participated in an EEOC mediation session with Janover during which the parties signed a settlement agreement wherein Janover paid Mr. Daus a small sum in exchange for a general release. That release expressly provided that Mr. Daus was executing the release on his own behalf and behalf of his heirs, executors, successors and beneficiaries, and that he waived all claims for alleged lost wages and benefits, including claims under ERISA. The settlement agreement also provided that Mr. Daus could consider the agreement for 21 days and that he had 7 days to revoke it after signing. Mr. Daus did not do so, and he was paid the agreed-upon amount. Later, Mr. Daus lost his life insurance coverage under Janover’s group policy. He alleges that Janover failed to notify him that he had the right to convert his coverage under the group policy to an individual policy, for which no premiums would be due because he was totally disabled. Mr. Daus, along with his wife, Traci Daus, then initiated this litigation against Janover asserting breach of fiduciary claims under ERISA in connection with the lost life insurance benefits. Janover and the Dauses cross-moved for summary judgment. On April 22, 2025, the court issued its summary judgment decision. The central question before the court was whether plaintiffs’ claims under ERISA were waived in the EEOC settlement agreement. The court found they were. Accordingly, the court granted Janover’s motion for summary judgment and denied plaintiffs’ motion. To get there, the court considered the Second Circuit’s six Laniok-Bormann factors to determine the knowledge and voluntariness of the waiver. First, the court concluded that Mr. Daus, a savvy senior tax manager, had the requisite sophistication and business experience to enter into the contract knowingly. Second, the court found that the amount of time he had to review the agreement, coupled with the period he had after the agreement to revoke it, meant that Mr. Daus signed the agreement only after giving it due consideration. Third, the court agreed with Janover that Mr. Daus and his counsel played at least some role in negotiating and deciding the terms of the agreement. Fourth, the court concluded that the terms of the agreement were clear and specific, and that these terms expressly announced that Mr. Daus agreed to waive claims under ERISA. Fifth, there was no question that Mr. Daus was represented by legal counsel. The only factor that complicated the picture somewhat was the sixth and final one – whether the consideration given in exchange for the waiver exceeded employee benefits to which the employee was already entitled by contract or law. Here, there was no question that the settlement payment was meager relative to the right of the couple to $500,000 in life insurance benefits at no premium cost. Nevertheless, the court determined that this factor did not strongly disfavor enforcement when considered in tandem with the others. Thus, the court held that Mr. Daus knowingly and voluntarily waived ERISA claims against Janover. The court then took a moment to consider Mr. Daus’s most substantial argument against enforcement – that on the day of the mediation he was in serious pain, recovering from spinal surgeries, and that his doctor had changed his prescription medication just one day before. Although the court acknowledged that Mr. Daus recounted serious pain, stress, and discomfort on the day of the settlement, even accepting this account, it simply felt that the proffered evidence was insufficient to overcome the presumption of his competency because the symptoms he described are “not of the sort that suggests he was unable to willingly and voluntarily enter into the Settlement Agreement.” Finally, the court agreed with Janover that Traci Daus’s claims would ultimately fail as well as they were encompassed by the waiver. For these reasons, the court found that all of the couple’s ERISA claims were validly encompassed by the EEOC settlement agreement provisions that released Janover from liability from all claims under ERISA in connection with Mr. Daus’s termination. Thus, the court entered judgment in favor of Janover. Plaintiffs responded to the court’s summary judgment decision with a motion for reconsideration. They additionally requested that the court seal the summary judgment decision, or alternatively, to redact portions of it pertaining to the EEOC settlement amount and Mr. Daus’s private health information. The court this week denied the motion for reconsideration, granted the motion to redact portions of the summary judgment decision, and reissued the summary judgment order in its redacted form. The crux of plaintiffs’ motion for consideration was an argument that Traci Daus has independent standing to maintain the claims at issue by virtue of her status as the intended beneficiary of the policy. “Plaintiffs argue, even if Paul Daus waived claims against the Defendants under ERISA, the Court must permit the case to proceed because his wife’s status as his beneficiary entitles her to bring the identical ERISA claims herself.” The court disagreed with plaintiffs on this point. The court found the cases plaintiffs relied on in support of their argument distinguishable as “[b]oth cases… surfaced a concern that employers may be able to dodge ERISA liability where a plaintiff’s lack of standing flowed from the employer’s own misrepresentations.” In the present action, there is no allegation that defendants’ fraudulent misrepresentations caused Ms. Daus to voluntarily relinquish her beneficiary status, rather the scenario here is one “in which a beneficiary seeks to assert standing to pursue ERISA claims derived from her spouse’s status as a plan participant, which has long since ended and has no reasonable possibility of revival.” Accordingly, the court maintained its prior view that Ms. Daus is without standing to pursue the claims set forth in the complaint. The court thus denied the motion for reconsideration. Finally, the court concluded that while sealing the entirety of the summary judgment decision would be inappropriate, limited redactions to address plaintiffs’ privacy concerns around Mr. Daus’s medical information and the precise amount paid under the terms of the EEOC settlement agreement are justified. As a result, the court granted the motion to seal in part and reissued its summary judgment decision to reflect these changes.

Fourth Circuit

New v. Metropolitan Life Ins. Co., No. 1:24-00212, 2025 WL 2263007 (S.D.W.V. Aug. 7, 2025) (Judge David A. Faber). Before his death on June 29, 2023, Troy New was on total disability workers’ compensation and leave from his employment as a continuous miner operator with Cleveland-Cliffs Princeton Coal, Inc. Troy had injured himself the year before on April 1, 2022, and had been receiving workers’ compensation benefits ever since. Through his employment with Cleveland-Cliffs Troy was a participant of a basic group life and accidental death and dismemberment policy. His son, plaintiff Tyler Dwayne New, was the beneficiary of the policy. However, following his father’s death, Tyler was denied benefits under the plan by the policy’s insurer, MetLife. MetLife explained in the denial letter that the policy only continues to cover employees on leave for six months, “[t]he Policy does not allow coverage to continue while an employee is not actively at work due to injury or sickness for a period greater than six months.” After MetLife affirmed its decision on appeal, Tyler New brought this lawsuit. In his complaint, Tyler alleges a single claim for wrongful denial of benefits against MetLife under Section 502(a)(1)(B). The parties filed competing motions for summary judgment. In this order the court granted MetLife’s motion for summary judgment and denied plaintiff’s motion. It is undisputed that Troy New never received written notice of his right to convert the group plan into an individual one and that Cleveland-Cliffs continued to pay premiums for his coverage until his death. Tyler New argued, in support of his summary judgment motion, that the failure to provide notice of the right to convert the group policy to an individual policy resulted in his father failing to have life insurance at the time of his death. Alternatively, Tyler argued that the coverage never lapsed in the first place. MetLife countered that Tyler’s claim regarding his father’s entitlement to written notice of his right to convert the policy should be brought as a breach of fiduciary duty claim, not as a claim for benefits. Moreover, MetLife contended that under the plain and unambiguous language of the plan, the coverage had lapsed, and the court must defer to its reasonable interpretation of the policy under arbitrary and capricious review. The court first considered the threshold question of whether the coverage lapsed under the terms of the policy. It found that it had. Contrary to Tyler New’s arguments, the court determined that the relevant provision stating that coverage can only be extended for “up to six months” is unambiguous. Additionally, the court disagreed with Tyler that Cleveland-Cliffs was prohibited from terminating his father’s life insurance coverage while he collected workers’ compensation benefits under West Virginia law. The law Tyler pointed to, the court found, applies only to health insurance, not life insurance policies. Having determined that the coverage had indeed lapsed, the court turned to Tyler’s claim that he is entitled to the life insurance benefits because MetLife was required to send written notice to his father about his conversion rights. The court agreed with MetLife that this claim should have been brought as a fiduciary breach claim, rather than as a claim for benefits. But even assuming that MetLife owed a duty to provide a written notice of the right to convert, the court concluded that there was no evidence that MetLife knew Troy’s employment had ended under the terms of the policy, which is the triggering event for any potential notice requirement. Accordingly, the court determined that there were no genuine issues of material fact as to whether MetLife breached its fiduciary duty to Mr. New. The court therefore entered judgment in favor of MetLife. Finally, in a last note at the end of the decision, the court afforded Tyler the opportunity, should he wish to, to amend his complaint to assert a fiduciary breach claim against Cleveland-Cliffs relating to its failure to provide his father written notice of the right to convert.

Medical Benefit Claims

Ninth Circuit

Emsurgcare v. Oxford Health Insurance, Inc., No. 2:24-cv-04612-SVW, 2025 WL 2206114 (C.D. Cal. Jul. 31, 2025) (Judge Stephen V. Wilson). This lawsuit arises from an emergency colectomy surgery performed on a patient in 2021 to treat his life-threatening appendicitis. The two surgeons who performed the surgery, Drs. Feiz and Rim, initiated this ERISA action seeking to challenge benefit determinations made under an ERISA insurance plan administered and insured by defendant Oxford Health Insurance. In the case of Dr. Feiz’s claim for reimbursement, Oxford denied the claim outright and paid nothing. In Dr. Rim’s case, Oxford paid $2,691.36 of the $71,500 he billed. The court held a bench trial in this action on July 15, 2025. In this decision the court provided its findings of fact and conclusions of law and entered judgment in part for both parties. Before the court analyzed whether Oxford’s denials of the surgeons’ claims violated ERISA, it determined what standard of review to apply. As an initial matter, the court noted that the plan unambiguously confers discretion on Oxford such that the court must apply an abuse of discretion standard absent wholesale or flagrant violations of the procedural requirements of ERISA. Nevertheless, the court agreed with the providers that defendant “committed numerous procedural violations when adjudicating both Dr. Feiz and Dr. Rim’s claims.” These included its failure to engage in a meaningful dialogue, its failure to provide specific reasons for denying the claims, its failure to provide Dr. Feiz with adequate opportunity to respond to its stated rationale for denying his appeal, its changing rationales for denial, and its failure to adequately respond to Dr. Feiz’s request for documents it relied on when denying his claim. Nonetheless, the court viewed these failings as not “serious enough to justify de novo review,” and instead caused the court merely to temper its abuse of discretion analysis. Further supporting the need to apply skepticism to the denials was Oxford’s conflict of interest in the case, particularly regarding Dr. Feiz’s claim. The court concluded there were “multiple reasons to find that a conflict of interest impacted Defendant’s decision to deny Dr. Feiz’s claim,” such as the fact it never asked Dr. Feiz to correct the operative report by providing his signature, as well as its decision to not consider the signed operative report once Dr. Feiz provided it on appeal. Moreover, the court observed that Oxford paid the facility where the surgeons performed the colectomy. In a telling statement, the court wrote, “[t]his partial payment raises serious questions about Defendant’s justification for denying Dr. Feiz’s claim. By reimbursing the Hospital for services related to the same colectomy, Defendant effectively acknowledged that the procedure occurred. Yet in denying Dr. Feiz’s claim, Defendant cited an allegedly deficient operative report as grounds for being unable to ‘verify the validity and accuracy of the service provided.’ Those two positions cannot be squared. Either the colectomy happened, or it did not.” Thus, while not determinative in and of itself, the court found that Oxford’s conflict of interest affected its decision-making and that it needed to be taken into account. The court then turned to the dispositive questions: whether Oxford abused its discretion in denying Dr. Feiz’s claim in full and whether it abused its discretion when it denied Dr. Rim’s claim in part? The court gave different answers for each claim. It tackled Dr. Feiz’s claim first. The court concluded that with regard to Dr. Feiz Oxford acted arbitrarily and capriciously by denying his claim on the basis that the signature on his operative report was not proper. “Put simply, Defendant’s decision to deny Dr. Feiz’s claim and subsequent appeal was ‘implausible.’ Review of the administrative record shows that Defendant did not actually hold concerns about the validity and accuracy of Plaintiff’s colectomy, but rather used the lack of proper signature on Dr. Feiz’s operative report as a pretext to deny benefits. Denial of benefits on such a basis is an abuse of discretion.” Accordingly, the court entered judgment in favor of plaintiffs on Dr. Feiz’s ERISA claim and remanded to Oxford for proper adjudication and payment of his claim according to the terms of the plan. Conversely, the court held that Oxford did not abuse its discretion when it paid only a small fraction of Dr. Rim’s claim for reimbursement. For one thing, the court agreed with Oxford that Dr. Rim failed to exhaust the internal administrative appeal procedures before appearing in court. Even putting that issue aside, the court ultimately concluded that Oxford acted reasonably in executing the terms of the plan and calculating the rate of reimbursement. “Certainly, $2,691.36 is a very small portion of the $71,500 billed. But it appears to nonetheless fall within the terms of the Plan. The Plan simply requires that Defendant pay ‘an amount permitted by law.’ Plaintiffs have not identified any law that does not permit Defendant to pay Dr. Rim $2,691.36 of his $71,500 billed. Given that Plaintiffs hold the burden of proof in this case, this is a fatal deficiency.” As a result, the court entered judgment in favor of Oxford with respect to Dr. Rim’s claim.

Pension Benefit Claims

Sixth Circuit

Oakman v. International United Automobile Aerospace and Agricultural Workers, No. 1:23-CV-00026-GNS-HBB, 2025 WL 2242764 (W.D. Ky. Aug. 6, 2025) (Judge Greg N. Stivers). Plaintiff Gary Oakman brought this action against the General Motors Hourly Rate Employees Pension Plan, and its administrator, Fidelity Investments, after he was denied credited years of service under the plan for the six years he worked for American Sunroof Corporation before the company merged with General Motors in 1995. Mr. Oakman sought judicial review of the pension committee’s decision to deny him these additional benefits, bringing a single cause of action for recovery of denied benefits under Section 502(a)(1)(B). The plan moved for judgment on the administrative record. Mr. Oakman responded and filed a cross-motion for judgment on the administrative record, although importantly, his motion was filed late pursuant to the court’s scheduling orders. The court addressed the parties’ motions in this decision. As an initial matter, the court applied the arbitrary and capricious standard of review as both parties agreed that the plan grants GM and the pension committee discretionary authority to make benefit decisions. The court noted that the plan contains two seemingly contradictory provisions. “First, Article III, Section 1(a)(1) sets forth the main provision for determining years of credited service, stating that ‘[c]redited service shall be computed for each calendar year for each employee on the basis of total hours compensated by any plant or Division of General Motors LLC during such calendar year while the employee has unbroken seniority.’ Second, Article III, Section 1(k) states that ‘Notwithstanding any other Section of this Article III, . . . the employee’s credited service for the period prior to January 1, 1996[,] shall not be less than the employee’s seniority as of December 31, 1995.’” The Plan argued that its determination not to credit the years of service at American Sunroof Corp, was supported by the plain language of the plan. The court disagreed. “In the current case, it is clear that The Plan’s interpretation of the determination of benefits was not ‘the result of a deliberate, principled reasoning process’ because its decision expressly contradicts the terms of The Plan. The Plan bases its decision on the language of Section 1(a)(1) without acknowledging that Section 1(k) begins with ‘[n]otwithstanding any other Section of this Article III . . . .’” The use of the word “notwithstanding” the court determined, makes clear that the language of Section 1(k) overrides the calculation of credited services under Section 1(a)(1), because “Section (1)(k) applies ‘without prevention or obstruction’ by any other provision of Article III.” As a result, the court determined that Mr. Oakman is entitled to a calculation of credited service consistent with his seniority status, and there is no dispute that Mr. Oakman’s date of seniority was September 27, 1989, or the date of his initial employment with American Sunroof. Accordingly, the court held that the plan’s decision to deny Mr. Oakman’s request for additional benefits was arbitrary and capricious because it did not comport with the clear language of the plan. The court therefore denied the plan’s motion for judgment on the administrative record. However, the court did not enter judgment in favor of Mr. Oakman, despite its determination that he should be entitled to credited service under the plan equal to his seniority status. The court concluded that it could not enter judgment in favor of Mr. Oakman because he not only failed to file a timely dispositive motion for judgment on the administrative record, but also failed to provide any explanation why the deadline could not have been met. The court therefore “reluctantly” decided that Mr. Oakman’s cross-motion for judgment had to be denied as untimely and that his claims against the plan and Fidelity must be dismissed.

Pleading Issues & Procedure

Sixth Circuit

R.S. v. Medical Mutual Servs., LLC, No. 1:23-cv-01127, 2025 WL 2195363 (N.D. Ohio Aug. 1, 2025) (Judge David A. Ruiz). Plaintiff R.S. sued her health benefit plan, defendant Case Western Reserve University Benefits Plan, its administrator, defendant Case Western Reserve University, and its third-party administrator, defendant Medical Mutual Services, LLC, on behalf of herself and her son, I.R., to challenge defendants’ denial of the family’s claim for I.R.’s residential mental health treatment at a facility in Utah. R.S.’s complaint raises three causes of action: (1) a claim for recovery of benefits under Section 502(a)(1)(B); (2) a claim for equitable relief based on an alleged violation of the Mental Health Parity and Addiction Equity Act (“MHPAEA”) under Section 502(a)(3); and (3) a claim for statutory penalties under Sections 502(a)(1)(A) and (c). Defendants Case Western Reserve University and Case Western Reserve University Benefits Plan moved to dismiss the second cause of action. Defendant Medical Mutual Services moved for partial judgement on the pleadings regarding R.S.’s second and third causes of action. Plaintiff opposed both motions. In this order the court denied the motions as they pertain to count two and granted Medical Mutual Services’ motion as to count three. The court began with the MHPAEA violation claim. It disagreed with defendants that the 502(a)(3) claim was duplicative of the claim for benefits under Section 502(a)(1)(B). The court held that plaintiff is permitted to plead the two claims in the alternative, and noted that although they both revolve around the denial of benefits they present distinct theories and focus on distinct remedies. “In Count I, Plaintiff pleaded that the terms of the Plan were wrongly applied to her claim, resulting in a wrongful denial of benefits. In Count II, Plaintiff makes a different allegation – the Plan as written violates the MHPAEA. This claim asserts that even if the terms of the Plan are found to have been correctly applied to her benefits claims, foreclosing recovery under Count I, Plaintiff still has a case against Defendants. So, while Defendants are correct that it would be improper for Plaintiff to also allege that the terms of the Plan were improperly applied under § 1132(a)(3), that is not what Plaintiff has pleaded. The difference between the two claims is that Plaintiff is bringing the MHPAEA claim to challenge the plan as written, not as applied.” Further, R.S. can only possibly amend the terms of the plan through an equitable claim, as the Supreme Court has made clear that the terms of an ERISA plan cannot be changed under Section 502(a)(1)(B). At this stage of the proceedings, the court determined that it is simply too early to determine whether R.S.’s injury can be remedied under Section 502(a)(1)(B). The court therefore denied both motions seeking dismissal of count two. The court then discussed Medical Mutual Services’ motion for judgment on the statutory penalties claim. Put simply, the court agreed with Medical Mutual Services that it cannot be liable to R.S. for unanswered document requests because it is not the administrator of the plan. Therefore, the court granted Medical Mutual Services’ motion for judgment on the pleadings as to this claim against it.

Provider Claims

Fifth Circuit

Angelina Emergency Medicine Associates PA v. Blue Cross & Blue Shield of Ala., No. 24-10306, __ F. 4th __, 2025 WL 2268126 (5th Cir. Aug. 8, 2025) (Before Circuit Judges Smith, Higginson, and Douglas). Plaintiff-appellants in this ERISA action are fifty-six Texas emergency medicine physician groups. They filed suit against twenty-four Blue Cross Blue Shield-affiliated plans from outside of Texas alleging that the Blue Plans underpaid them for 290,000 claims for reimbursement. After a settlement with some of the defendants, more than 75% of the claims were dismissed. The district court later granted summary judgment in favor of defendants on the remaining claims. The district court identified five issues with plaintiffs’ claims: (1) the physician groups were not named in the assignments; (2) the assignments did not include a right to sue; (3) the assignments themselves were not produced; (4) the underlying plans contained valid anti-assignment clauses; and (5) the physician groups failed to exhaust administrative remedies under the applicable plans before filing suit. (Your ERISA Watch covered this decision in its January 17, 2024 edition.) Plaintiffs appealed. The Fifth Circuit revived nearly all of their claims in this decision, affirming the district court’s decision only as to the claims where no written assignment was produced. As to the remaining claims, the Fifth Circuit identified several issues that require further examination. First, the Fifth Circuit held that the lower court was wrong to dismiss the provider’s claims for lack of standing because the assignments were made to “health care providers” rather than naming the physician groups themselves. The court of appeals agreed with plaintiffs that the term “provider” is ambiguous and subject to two or more reasonable interpretations. At a minimum, the Fifth Circuit held that the lower court should have allowed the parties to introduce evidence of the intended scope of the assignments, and its grant of summary judgment was accordingly premature. Next, the Fifth Circuit rejected the district court’s holding that the assignments provided only a right to administrative relief rather than the right to seek legal relief. The appeals court stressed that the assignments assign “all rights.” It wrote, “there is no basis in the law for requiring that an assignment specifically state it provides a right to sue when it assigns ‘all rights.’ The district court erred in finding that claims assigning rights or insurance benefits did not assign a right to sue.” The Fifth Circuit then turned to the claims where the physician groups do not have written assignments. The court of appeals affirmed the dismissal of these claims and concluded that the district court acted reasonably in doing so. In addition to finding issues with the assignments, the district court had also dismissed claims where the underlying plans contained anti-assignment provisions. The Fifth Circuit reversed this basis for dismissal. It concluded that there were genuine issues and open questions about whether the Blue Plans were estopped from enforcing the anti-assignment clauses. It stated that the matter of estoppel “is a fact issue that the district court must determine as to each claim.” Finally, the Fifth Circuit held that the district court was too quick to dismiss claims for failure to exhaust administrative remedies. “At bottom, the Physician Groups argue that they made all possible efforts to obtain the underlying plans and understand alternative appeals processes, while still following the publicly available appeals process, but were not given copies of the plan. We have previously held that a claimant’s efforts, or lack thereof, to obtain the plan can be a key fact in finding whether the claimant has cleared the hurdle of ERISA exhaustion. At a minimum, there is a factual dispute as to whether the Physician Groups could have discovered the member appeals process without action by [Blue Cross], and whether it would have been reasonable to require the Physician Groups to undertake that separate process when they were already being partially paid by [the Blue Plans].” Based on the foregoing, the Fifth Circuit vacated summary judgment as to all claims except those with no written assignment in evidence. Accordingly, the physician groups’ action has been resurrected, and they may yet receive further compensation for some or all of the remaining claims at issue.

It was another slow-ish week in ERISA-land, so we have no notable decision to highlight. However, read on to learn more about how (1) a wrongful death claim prompted by an astronomical increase in the price of an asthma inhaler is not preempted by ERISA (Schmidtknecht v. OptumRx Inc.), (2) pharmacy benefit managers have temporarily stopped enforcement of Arkansas legislation attempting to rein them in (Express Scripts Inc. v. Richmond), and (3) moving to Mexico, although it sounds nice, can jeopardize your disability benefits (Archer v. Unum Life Ins. Co. of Am.). Of course, we have other cases as well involving various claims by plan participants, medical providers, and insurance companies for your reading pleasure.

Below is a summary of this past week’s notable ERISA decisions by subject matter and jurisdiction.

Breach of Fiduciary Duty

Eighth Circuit

Chirinian v. Travelers Companies, Inc., No. 24-cv-3956 (LMP/DTS), 2025 WL 2147271 (D. Minn. Jul. 29, 2025) (Judge Laura M. Provinzino). Plaintiff Charlie Chirinian filed this putative class action alleging that Travelers Companies Inc. and the administrative committee of its employer-sponsored healthcare plan are imposing a tobacco surcharge which is in violation of ERISA and the requirements of 29 C.F.R. § 2590.702(f)(4). In her first cause of action Ms. Chirinian asserts that defendants illegally surcharged her and other plan participants for their tobacco use in violation of ERISA’s nondiscrimination rule in 29 U.S.C. § 1182. Additionally, Ms. Chirinian alleges that Travelers breached its fiduciary duties to plan participants by “administering a Plan that does not conform with ERISA’s antidiscrimination provisions,” “acting on behalf of a party whose interests were averse to the interests of the Plan and the interests of its participants,” and “by failing to act prudently and diligently to review the terms of the Plan and related plan materials.” Her fiduciary breach claims are brought under Section 502(a)(2). Defendants moved to dismiss the complaint. They argued that Ms. Chirinian lacks Article III standing to pursue her claims, her claims are entirely time-barred under the plan, and putting those issues aside, her complaint fails to state a claim upon which relief can be granted. In this order the court granted in part and denied in part defendants’ motion to dismiss. The court addressed the threshold issue of standing first, and largely concluded that Ms. Chirinian has standing to press her claims, though not insofar as she seeks to pursue prospective injunctive relief. As a former plan participant, the court agreed with defendants that Ms. Chirinian cannot allege a real or imminent threat of ongoing or future harm based on the conduct regarding the tobacco surcharge. Moreover, because Ms. Chirinian personally lacks standing to seek prospective injunctive relief, the court concluded that she also could not seek such relief on behalf of the plan. More broadly, however, the court rejected defendants’ standing arguments. It concluded that Ms. Chirinian suffered a concrete harm when she was required to pay the tobacco surcharges that Travelers was allegedly not legally authorized to levy. This harm, the court added, is traceable to Traveler’s decision to levy the tobacco surcharge, and it can be redressed by a refund of money to the participants who were illegally charged. As a result, the court found that Ms. Chirinian has standing to pursue her action. Next, the court concluded that Ms. Chirinian’s claims are not time-barred. The plan’s limitation period requires that a participant bring a lawsuit within one year of the act or omission that gives rise to the claim. The court concluded that Travelers “acted” each time it imposed an allegedly unlawful tobacco surcharge on Ms. Chirinian. It then determined that, “Chirinian filed suit on October 17, 2024, meaning that Chirinian may challenge the tobacco surcharges imposed since October 17, 2023. Because Chirinian paid tobacco surcharges until August 3, 2024, she is not time-barred from challenging the tobacco surcharges Travelers levied on her from October 17, 2023, to August 3, 2024.” Having ruled on these threshold issues, the court proceeded to analyze the merits of Ms. Chirinian’s claims. It tackled the claim alleging violations of the antidiscrimination rules first. Ms. Chirinian asserts that Travelers’ tobacco cessation program fails to meet the requirements of 29 C.F.R. § 2590.702(f)(4) in three ways. First, she takes issue with the program’s timing restrictions and the fact that the individuals participating in the tobacco cessation program must enroll by March 31 of the plan year and complete the program by December 15 of that same plan year. The court did not agree that this provision was problematic. To the contrary, it found that the plan complies with 29 C.F.R. § 2590.702(f)(4)(i) because it offers participants the opportunity to qualify for the reward under the program at least once per year. The court stated that “ERISA requires nothing more of Travelers.” The court therefore rejected Ms. Chirinian’s first theory of how the program violates ERISA’s requirements. It rejected her second theory as well, wherein she argued that the plan materials do not disclose the availability of a legally compliant reasonable alternative standard. It noted that this argument was premised on Ms. Chirinian’s argument that Travelers failed to offer participants the full reward. But the court did not agree and found the complaint failed to plausibly allege as much. Ms. Chirinian had better luck with her third and final argument challenging the plan’s compliance with ERISA’s antidiscrimination rules. She alleges that the plan materials do not include a statement that recommendations of an individual’s personal physician will be accommodated as required by 29 C.F.R. § 2590.702(f)(4)(v). Taking a look at the plan, the court agreed. It therefore denied the motion to dismiss the antidiscrimination claim. “Because Chirinian has plausibly alleged that the Plan does not satisfy “all” of the requirements of 29 C.F.R. § 2590.702(f)(4), Chirinian has plausibly alleged that Travelers violated ERISA’s antidiscrimination rules by imposing a tobacco surcharge.” Finally, the court addressed the breach of fiduciary duty claims. The court granted defendants’ motion to dismiss these claims as it agreed with Travelers that Ms. Chirinian fails to plausibly allege that the plan suffered any losses as a result of the alleged breaches having to do with the tobacco surcharge. In fact, the court considered that the opposite was likely true – that the alleged breaches likely served to benefit the plan because the plan’s assets were increased by the allegedly unlawful tobacco surcharges. Based on the foregoing the court dismissed without prejudice the two fiduciary breach claims.

Disability Benefit Claims

Ninth Circuit

Archer v. Unum Life Ins. Co. of Am., No. 2:23-cv-01128-LK, 2025 WL 2107491 (W.D. Wash. Jul. 28, 2025) (Judge Lauren King). Before the onset of her disability, plaintiff Pamela Archer was a nurse. Her employers included the U.S. Army during the first Gulf War, and later Providence Health & Services. In late 2012, Ms. Archer stopped working due to a combination of ailments. She began receiving long-term disability benefits under an ERISA-governed policy insured by Unum the following year. In October of 2019, Ms. Archer moved to Mexico. A year later she informed Unum of her living situation in response to a form the insurer sent her inquiring about her condition. Then a year and a half later, in April of 2022, Unum suspended Ms. Archer’s benefits. Unum informed Ms. Archer that her eligibility for benefits had ended in April 2020 after six months of her living in Mexico, because her policy contained an out-of-country provision which explains that benefits will stop if a claimant resides outside of the United States for a total period of 6 months in any given year. “Unum further notified Archer that its payment of benefits over a period when she was no longer eligible, i.e., between April 20, 2020 and April 27, 2022, resulted in an overpayment of $62,893.14 which Unum sought to recover.” Ms. Archer challenged the termination of her benefits. Following an unsuccessful administrative appeal she filed an action under ERISA alleging Unum wrongfully terminated her ongoing disability benefits and violated its fiduciary duties by failing to inform her of the international residency provision. Although Ms. Archer concedes that she did not comply with the policy’s U.S. residency requirement, she maintains that she was unable to do so because of travel challenges surrounding the COVID-19 pandemic. Unum responded to Ms. Archer’s action by filing its own counterclaim for overpayment of benefits. The parties submitted competing motions for judgment on the record pursuant to Rule 52. Applying de novo review, the court found in favor of Unum regarding Ms. Archer’s claim for benefits and breach of fiduciary duty. To begin, the court determined that Unum lawfully terminated the benefits, because its decision was consistent with the unambiguous terms of the plan. As the policy required Ms. Archer to spend more than 50% of any 12-month period in the United States, it was clear to the court that there was no dispute Ms. Archer did not do so, and as such that she was in violation of a requirement for benefit eligibility under the policy. Furthermore, the court determined that it was not impossible for Ms. Archer to comply with the international residency provision because she was a U.S. citizen who could have traveled back to her home country at any time, even during the height of the COVID travel restrictions and lockdowns. Indeed, the court noted that the record clearly establishes that regardless of the pandemic it was Ms. Archer’s intent to make Mexico her primary residence for more than six months out of the year. Moreover, the court was unpersuaded that Ms. Archer could not safely fly during this time period, and noted that she did so, traveling throughout Mexico and even into the United States. For these reasons, the court declined to waive Ms. Archer’s noncompliance with the policy provision based on her assertion of impossibility, and found that Unum properly terminated her continuing benefits based on the plain language of the plan. The court then held that Unum’s failure to warn Ms. Archer about the international residency provision did not amount to a breach of fiduciary duty. “Even crediting Archer’s plausible but unsupported assertion that she was subjectively unaware of the international residency provision, she does not assert that Unum failed to provide her with the relevant Plan or Policy documents in the first instance. And the Policy language regarding when a beneficiary is considered to reside outside the United States is conspicuous, plain, and clear.” The court added that this was true for the overpayment provision in the plan as well and that she therefore had constructive notice of the relevant plan provisions. Additionally, the court disagreed with Ms. Archer that Unum’s 18-month delay in enforcement constituted a breach of fiduciary duty or that a delay could otherwise waive enforcement of a plan provision. Accordingly, the court found that Ms. Archer was not entitled to equitable relief based on a breach of fiduciary duty. The court thus entered judgment in favor of Unum on both of Ms. Archer’s claims. However, the court did not reach a decision on Unum’s counterclaim. Instead, it ordered supplemental briefing on the issue of the appropriate termination date and the meaning of the language regarding the timing of payment cessation. Until it has this briefing, the court deferred resolution of the overpayment claim and a decision on the amount of repayment Ms. Archer owes.

Tenth Circuit

Ramos v. Schlumberger Grp. Welfare Benefits Plan, No. 22-CV-0061-CVE-JFJ, 2025 WL 2098102 (N.D. Okla. Jul. 25, 2025) (Judge Claire V. Eagan). Plaintiff Ramon Ramos filed this action to challenge the denial of his claim for short-term disability benefits by the Schlumberger Group Welfare Benefit Plan. Mr. Ramos argued that he had documented psychiatric, neurological, and cognitive limitations that prevented him from working in his position as an environmental specialist. In an earlier order the court remanded the case for clarification of the plan administrator’s decision to deny plaintiff’s second voluntary appeal. The plan administrator issued the required clarification of its previous decision during the remand, although Mr. Ramos argued that it failed to do so within 30 days of the court’s ruling. The court reopened the case for new briefing on the merits of the ERISA claim, but rejected Mr. Ramos’ argument that the plan administrator’s decision on remand was untimely. The parties then filed their briefing on the merits of the plan administrator’s denial, and the court agreed that the ERISA claim was ready for adjudication. Accordingly, the court issued this decision, which constituted its final review of the adverse decision. As an initial matter, the court addressed the parties’ dispute over the applicable standard of review. The court determined that the proper standard of review was arbitrary and capricious as the plan clearly grants the administrator discretionary authority and because it found that the “alleged procedural irregularities in this case are not of the same type or severity that would warrant de novo review of plaintiff’s ERISA claim.” The court added that the errors Mr. Ramos cited as reasons to alter the standard of review have been “rejected in previous rulings by the Court or are substantive in nature, and the Court finds no reason to vary from the standard of review typically applicable to ERISA claims when the decision maker has the discretionary authority to make benefits determinations.” The court therefore assessed the denial under deferential review. Mr. Ramos argued that he produced a substantial amount of medical evidence that supported his symptoms. The plan responded that Mr. Ramos could not meet his burden to prove that its contrary interpretation of the medical evidence was an abuse of discretion and maintained that it was not required to defer to his treating physician’s findings that he had functional limitations that prevented him from working. The court first held that it was reasonable for the plan’s reviewing doctors to discount the results of plaintiff’s poor neurocognitive testing because they reasonably explained their position that he feigned an impairment and put an intentional lack of effort into the testing. Mr. Ramos next argued that there were problems with the plan’s independent medical examination of him. He noted that the plan administrator failed to provide the doctor performing the test with certain critical pieces of medical information. In addition, Mr. Ramos called into question how independent the independent medical examination was given Cigna’s role in setting up the exam and “dictat[ing] the focus” of it. The court, however, disagreed. It found the plan’s failure to provide the doctor with the relevant medical reports immaterial, harmless, and ultimately having “had no bearing on the results” of the test. The court was not persuaded by Mr. Ramos’ suggestion that the doctor’s findings would have been affected had he been provided with these documents. As to Cigna’s involvement in the independent medical examination, the court concluded that Mr. Ramos failed to demonstrate that Cigna “participated” in the exam “or directed” its outcome. Moreover, although the court acknowledged that it appeared to be unfair that Cigna set up the exam, it stated that Mr. Ramos could not show that it resulted in bias on the part of the doctor performing it, or that the results would have been different if the administrator did not directly set up the test. The court further rejected Mr. Ramos’ argument that the plan administrator disregarded the medical findings of his treating physicians as merely his own self-reporting of his symptoms. Rather, the court found that the plan administrator’s conclusion that the evidence did not support a finding of any functional limitation caused by mental impairments to be supported by substantial evidence. Finally, the court stipulated that in its view the parties’ dispute over the consideration of “objective medical evidence” had no bearing on the outcome of Mr. Ramos’ claim for benefits. Thus, based on the foregoing, the court concluded that the plan administrator had not acted arbitrarily or capriciously when it determined that the medical evidence did not establish that Mr. Ramos was disabled under the terms of the plan. The court therefore affirmed defendant’s decision to deny Mr. Ramos’ claim for short-term disability benefits.

ERISA Preemption

Seventh Circuit

Schmidtknecht v. OptumRx Inc., No. 25-CV-93, 2025 WL 2096866 (E.D. Wis. Jul. 25, 2025) (Judge Byron B. Conway). This wrongful death action arose after a young man, Cole Schmidtknecht, suffered a deadly asthma attack on January 15, 2024. Cole had suffered from asthma all his life. His asthma was treated with a prescribed inhaler that was covered through his insurance with United Healthcare. On January 10, 2024, Cole went to his local Walgreens pharmacy to refill his prescription. It was then that the pharmacist told him that his insurer no longer covered his inhaler and that his prescription would cost him $539.19. Cole only had enough money for his typical co-pay, which was less than $70. He had received no advanced warning of this coverage change, and Walgreens made no effort to assist him in obtaining an alternative covered treatment. Unable to afford the cost of the prescription, Cole left without his inhaler. Five days later, Cole experienced a severe asthma attack. By the time his roommate got him to the hospital, Cole was unconscious, pulseless, and blue. Cole was immediately put onto a ventilator, but sadly he did not recover. He was pronounced dead six days later. After their son’s death, Cole’s parents, Shanon and William, filed this wrongful death action against Optum Rx, Inc. and Walgreens. They allege that Optum Rx violated a Wisconsin law requiring that it give notice to Cole that his prescription would no longer be covered. Plaintiffs maintain that the pharmacy benefit manager chose to stop covering Cole’s prescribed inhaler not because of any legitimate medical reason, but based purely on its own financial incentives. Optum Rx moved to dismiss the family’s complaint. It argued that the wrongful death action is preempted by both Sections 514(a) and 502(a) of ERISA. The court disagreed and denied the motion to dismiss. At the outset, the court stated that plaintiffs are not attempting to assert a claim directly under the Wisconsin laws which regulate pharmacy benefit managers, but rather that they point to the state statutes “as establishing the duties that Optum Rx owed to the Cole and thus as a foundation for a wrongful death claim.” By contrast, the court found that the ERISA plan is not the foundation of the parents’ claim, nor a necessary component of it. “Optum Rx has not shown that the plaintiffs’ claim will require the court to cross the line into interpretation or application of the terms of the plan. Rather, in relation to the plaintiffs’ claim as pled in the amended complaint, the facts related to the plan appear to be undisputed, secondary, and superficial. The plan provides merely the context for the dispute akin to how a plan may provide the foundation for a fraud or misrepresentation claim.” The court emphasized that plaintiff’s theory of harm is not premised on Optum Rx’s denial of benefits, but instead focuses on an argument that the pharmacy benefit manager was negligent because it failed to give Cole notice that it would no longer be covering his medication and that his out-of-pocket costs would skyrocket as a result. This theory, the court determined, is not necessarily preempted by ERISA, given that “Optum Rx has failed to demonstrate that either ERISA or the plan documents address whether a participant is entitled to notice regarding changes to prescription drug benefits or the nature and extent of any such notice.” Accordingly the court concluded that the wrongful death claim may be viable in some form. As a result, the court denied Optum Rx’s motion seeking the claim’s dismissal.  

Eighth Circuit

Express Scripts Inc. v. Richmond, No. 4:25-CV-00520-BSM, 2025 WL 2111057 (E.D. Ark. Jul. 28, 2025) (Judge Brian S. Miller). A group of pharmacies and pharmacy benefit managers filed this action alleging that a new Arkansas law, Act 624, which restricts pharmacy benefit managers’ ability to own and operate pharmacies in the state, violates the Commerce Clause, the Privileges and Immunities Clause, the Supremacy Clause because it is preempted by TRICARE, ERISA, Medicare, the Bill of Attainder Clause, the Takings Clause, and the Equal Protection Clause. Plaintiffs moved for a preliminary injunction, enjoining Act 624 from taking effect on January 1, 2026. In this order the court granted the motion and blocked the law during the pendency of the case. The court concluded that Act 624 “likely violates the Commerce Clause and it is likely preempted by TRICARE.” With regard to the Commerce Clause, the court was inclined to agree with plaintiffs that the law overtly discriminates against them as out-of-state companies and that the state has failed to show that it has no other means to advance its interests. As for the federal TRICARE program which provides health insurance plans to service members of the U.S. armed forces, the court determined that it is likely the Act is both explicitly and impliedly preempted by the statute. It stated that Act 624 conflicts with TRICARE’s health care delivery provision because it prohibits pharmacies owned by pharmacy benefit managers “from delivering healthcare to Arkansas patients. This prohibition is inconsistent with the TRICARE program that has existing contracts with some of the plaintiffs.” Moreover, the court noted that Act 624 “frustrates the ‘stability,’ ‘uniform[ity],’ and ‘national’ character of TRICARE.” Although the court concluded that plaintiffs are likely to prevail on their Commerce Clause and TRICARE preemption claims, this sentiment did not carry over to all of plaintiffs’ claims. “Plaintiffs, however, are unlikely to prevail on their Privileges and Immunities, ERISA preemption, Medicare preemption, Bill of Attainder, Takings, and Equal Protection claims.” Examining ERISA preemption specifically, the court found that Act 624 does not have an impermissible connection with ERISA as it does not regulate the pharmacy benefit managers “in their capacity as employee benefit plan administrators. Rather, it merely regulates the requirements for obtaining a retail pharmacy license.” The court stated that the Arkansas regulation will certainly affect ERISA plans’ shopping decisions and have an indirect economic influence on the plans, but these downstream effects would “not bind plan administrators to any particular choice and thus function as a regulation of an ERISA plan itself.” In addition to ascertaining that plaintiffs are likely to prevail on two of their eight claims, the court also determined that the pharmacies and pharmacy benefit managers would suffer irreparable harm if a preliminary injunction were not issued because they face the threat of unrecoverable economic loss. Further, the court concluded that the balance of equities and public interest also favor plaintiffs and that no harm could come from enjoining the enforcement of an unconstitutional law. Accordingly, while not all of plaintiffs’ arguments were ultimately persuasive to the court, it nevertheless agreed with them that it is necessary to enjoin Arkansas Act 624 from taking effect.

Ninth Circuit

Stapleton v. United Healthcare Benefits Plan of CA, No. 1:25-cv-00351-SAB, 2025 WL 2142349 (E.D. Cal. Jul. 29, 2025) (Magistrate Judge Stanley A. Boone). Pro se plaintiff Jackie Stapleton sued United Healthcare Benefits Plan of California in the small claims division of California state court alleging that it owes her damages for its refusal to cover the full cost of her medically necessary ambulance ride which occurred on July 1, 2022. United removed the matter to federal court after it realized that the healthcare plan at issue is governed by ERISA. Arguing that the state law claims are completely preempted by ERISA Section 502(a) and that the court has federal question jurisdiction over this matter, United moved for dismissal of Ms. Stapleton’s complaint. Ms. Stapleton moved to remand her action. Magistrate Judge Stanley A. Boone issued this decision recommending that the court deny plaintiff’s motion to remand and grant United’s motion to dismiss with leave to amend. Both conclusions hinged on Judge Boone’s preemption analysis. Judge Boone viewed Ms. Stapleton’s action as one seeking to recover the cost of the ambulance bill that she believes should have been covered in full under the terms of her ERISA-governed health insurance plan. Thus, he agreed with United that this case is plainly about a denial of benefits, and that it therefore clearly could have been brought as a claim under Section 502(a)(1)(B). Furthermore, Ms. Stapleton’s challenge to United’s interpretation of the plan, and by extension its coverage determination, presents no independent legal duty divorced from ERISA. Because Judge Boone concluded that both prongs of the Davila preemption test are satisfied, he found that the state law claims at issue are completely preempted by ERISA and that removal under Section 502(a) was proper. It was therefore Judge Boone’s recommendation that the court deny the motion to remand. By the same token, the Magistrate concluded that dismissal of the preempted state law claims was appropriate and that United’s motion to dismiss should be granted. However, it was also Judge Boone’s opinion that Ms. Stapleton should be afforded the opportunity to amend her complaint to assert a new cause of action under ERISA. Accordingly, while he recommended that the court dismiss the complaint, he advised that it do so without prejudice and with leave to amend.

Medical Benefit Claims

Ninth Circuit

Cal. Spine & Neurosurgery Institute v. Zoetis, Inc., No. 24-cv-06528-NW, 2025 WL 2097481 (N.D. Cal. Jul. 25, 2025) (Judge Noël Wise). Plaintiff California Spine and Neurosurgery Institute filed this ERISA action against defendants Zoetis Inc., United Healthcare Services, Inc., and United Healthcare Insurance Company after the surgery center was reimbursed 2.1% of the billed costs for surgery services it provided to an insured patient. In its action, California Spine asserts two causes of action: (1) failure to pay ERISA plan benefits under Section 502(a)(1)(B) and (2) breach of fiduciary duties of loyalty and due care in violation of Section 502(a)(3). Defendants moved to dismiss the complaint. They argued that the provider is barred from suing under ERISA based on the plan’s anti-assignment provision, and that regardless the complaint fails to state claims for benefits or fiduciary breach. Moreover, defendants argued that United Healthcare Insurance Company is an improper party. The court addressed the anti-assignment provision first. Although as a general matter anti-assignment provisions in ERISA plans are valid and enforceable, the court emphasized that there are exceptions that render them unenforceable. Here, California Spine argued that United waived the anti-assignment provision. Plaintiff alleged that although United was aware during the administrative claims process that it was acting as its patient’s assignee it never asserted the assignment provision as the basis for the denial or even mentioned its existence. Under Ninth Circuit precedent, the court concluded that these facts were sufficient to allege that United waived its anti-assignment provision defense. Next, the court assessed whether California Spine adequately stated a claim for ERISA benefits. It concluded that it had as the complaint identifies the specific ERISA plan, and alleges that a United representative confirmed in advance of the surgery that the plan would cover the surgical services and that “co-insurance would be at 90% of usual and customary and the Provider’s co-insurance would be at 60% and not based on a Medicare Fee schedule.” Additionally, the court found plaintiff adequately stated a claim for breach of fiduciary duties by alleging “Defendants misrepresented coverage, misrepresented reimbursement rates, and issued deficient explanations of benefits.” Further, plaintiff asserted that these actions were not undertaken with the care of a prudent administrator and that it suffered damages as a result of United’s failure to honor the rates it quoted prior to the surgery, which it had relied on. Finally, the court denied defendants’ motion to dismiss United Healthcare Insurance Company as a defendant. The court noted that plaintiff pointed to an authorization for the surgical services that was issued by United Healthcare Insurance Company and alleges that both United defendants are third-party administrators of the plan. The court found these allegations sufficient to adequately plead a connection between United Healthcare Insurance Company and the conduct at issue in the case. For these reasons, the court denied the motion to dismiss.

Fifth Circuit

Columbia Medical Center of Plano Subsidiary, L.P., v. Anthem Blue Cross Life and Health Ins. Co., No. 4:24-cv-137, 2025 WL 2107996 (E.D. Tex. Jul. 28, 2025) (Judge Amos L. Mazzant). Plaintiffs in this action are hospitals in Texas that serve the Plano and Dallas metropolitan area. The hospitals entered into an agreement with Blue Cross and Blue Shield of Texas which provided that they would treat patients with Blue Cross health plans and then be reimbursed for those treatments. Plaintiffs allege that they rendered medically necessary services to three patients with Blue Cross healthcare plans, that they submitted the claims to Blue Cross, and that Blue Cross rejected the claims and denied the appeals because preauthorization was purportedly not obtained prior to providing service. Blue Cross has currently not paid anything on the claims at issue. Accordingly, the hospitals filed this action seeking the payments. They assert claims under ERISA and contract law. Blue Cross moved to dismiss the claims. The court analyzed the ERISA claim first. Blue Cross urged the court to dismiss the ERISA claim pursuant to Rule 12(b)(1), arguing that the providers failed to plausibly allege valid assignments of benefits which deprives them of standing to bring claims under ERISA. In response, the hospitals argued that the court should assess the issue of assignments pursuant to Rule 12(b)(6). The court found that “Defendant’s argument carries the day. Defendant’s Motion, as to Count I, must be analyzed under Rule 12(b)(1) because standing under ERISA invokes the Court’s subject matter jurisdiction.” The court then determined that Blue Cross’s attack on the assignments was factual. “Here, Defendant has launched a factual attack because it has challenged the underlying facts supporting the Complaint – whether the assignments exist at all – rather than merely challenging the allegations on their face.” Accordingly, the court expressed that plaintiffs needed to put forth evidence of valid and enforceable assignments of benefits from the patients rather than just allege their existence in order to survive the Rule 12(b)(1) motion to dismiss for lack of jurisdiction. As a result, the court dismissed the ERISA claim, but without prejudice. As for the contract claims, the court denied Blue Cross’s motion to dismiss finding that the complaint states plausible claims for relief and meets the elements to state its claims. Therefore, defendant’s motion to dismiss the contract claims pursuant to Rule 12(b)(6) was denied. Should they choose to do so, plaintiffs were given leave to amend their complaint to address the deficiency in their allegations regarding the assignments. Accordingly, the motion to dismiss was granted in part without prejudice, and otherwise denied. 

Pleading Issues & Procedure

First Circuit

Turner v. Liberty Mutual Ret. Benefit Plan, No. 20-11530-FDS, 2025 WL 2108841 (D. Mass. Jul. 28, 2025) (Judge F. Dennis Saylor IV). Plaintiff Thomas Turner was hired by Safeco Insurance Company in 1980. He worked for Safeco for the next 28 years, until it was acquired by Liberty Mutual Insurance Company in 2008, at which time he became an employee of Liberty Mutual. At the center of this putative class action is Liberty Mutual’s calculation of cost-sharing obligations for post-retirement medical benefits, and its decisions regarding whether to credit workers’ pre-merger years of service with Safeco. Mr. Turner has always maintained that after the acquisition of Safeco by Liberty Mutual, he was repeatedly advised that he would receive cost-sharing credit for his retiree health benefits based on a calculation of his years of service with both Safeco and Liberty Mutual. However, when he retired in 2018, Liberty Mutual made him choose between his Safeco and Liberty Mutual benefits. Mr. Turner challenged this determination of his post-retirement medical benefits and argued that Liberty Mutual was required to credit his years of service to both Safeco and Liberty Mutual. When it did not do so, Mr. Turner turned to litigation. On August 14, 2020, he filed this action against the Liberty Mutual defendants on behalf of himself and others similarly situated. He asserted four causes of action which included a claim for determination of plan terms and clarification of benefits, a claim for equitable relief based on allegations of fiduciary breach, a claim alleging defendants failed to provide plan documents, and a claim for failure to disclose plan limitations. On summary judgment, the court concluded that Mr. Turner’s post-retirement medical benefit under the Liberty Mutual plan was not a vested benefit, and that the unambiguous terms of the plan did not provide cost-sharing credit for his year with Safeco. The court also granted summary judgment in favor of defendants on the failure to provide plan documents and failure to disclose plan limitations claims. Despite finding in favor of defendants on counts one, three, and four, the court denied their motion for summary judgment on the fiduciary breach claim for equitable relief. It found that there were triable issues of fact regarding precisely what representations Liberty Mutual had made to Mr. Turner concerning whether his years of service with Safeco would be credited to him for the purpose of calculating his cost-share obligations under the Liberty Mutual retiree health plan. As a result, litigation continued. Mr. Turner subsequently filed a motion for class certification. On July 15, 2024, the court denied the motion for certification on the ground that the proposed class was based in part on a newly asserted claim that Mr. Turner was denied benefits under both the Safeco and the Liberty Mutual plans. “The initial complaint had alleged that plaintiff was denied benefits under only the Liberty Mutual plan; according to the initial complaint, plaintiff’s benefits under the Liberty Mutual plan were to be calculated based on the credit that he accrued – that is, his total years of employment – at both Safeco and Liberty Mutual. However, it did not allege that plaintiff was entitled to and denied benefits under both plans.” Mr. Turner now seeks leave to amend his complaint to address the pleadings concerning the combined-benefits theory, based on an assertion that he was improperly denied both his grandfathered Safeco benefits and his earned Liberty Mutual benefits. The court denied Mr. Turner’s request for leave to amend in this decision. First, the court held that the motion was unduly and unjustifiably delayed as it was filed five years after Mr. Turner initially brought this action. In the time since, discovery has closed and the court has ruled on two summary judgment motions and a motion for class certification. The court held that “[s]uch a significant delay is alone sufficient to deny the motion.” In addition to the motion’s lack of timeliness, the court also determined that allowing Mr. Turner to amend his complaint at this juncture would impose substantial and unfair prejudice on the defendants. Even assuming without deciding that the amendment would not entail significant or extensive new discovery, the court said that “amendment would nevertheless be unfairly prejudicial, as it would likely meaningfully affect defendants’ litigation strategy.” Consequently, the court concluded that the combined delay and prejudice cautioned against granting the motion for leave to amend the complaint. For these reasons, the court denied the motion.

It is a light and breezy week here in California and at Your ERISA Watch. So, we have no case of the week and just a few covered decisions.  Of note is an interesting attorneys’ fee decision from the Sixth Circuit, and two decision on petitions for interlocutory review under 28 U.S.C. § 1292(b), one granting the defendants’ petition in a pension annuitization case, and the other denying such a petition in a healthcare lawsuit bright by the former Seretary of Labor. 

Below is a summary of this past week’s notable ERISA decisions by subject matter and jurisdiction.

Attorneys’ Fees

Sixth Circuit

Canter v. Blue Cross Blue Shield of Mass., Inc., No. 24-3926, __ F. App’x __, 2025 WL 2058997 (6th Cir. Jul. 23, 2025) (Before Circuit Judges Moore, Griffin, and Ritz). Plaintiff-appellant Keith Canter received health insurance through an ERISA-governed healthcare plan administered by Blue Cross Blue Shield of Massachusetts, Inc. In 2015, Mr. Canter underwent back surgery and submitted two claims for $41,034 and $43,988. Blue Cross denied coverage of both claims, which prompted Mr. Canter to sue under ERISA. Mr. Canter was successful in his lawsuit and the district court granted summary judgment in his favor. It then remanded the case to Blue Cross to reconsider the benefit decision. Blue Cross reversed its benefits decision on remand and awarded Mr. Canter $85,022 for the two claims that were previously denied. Mr. Canter moved to reopen the case following the remand decision and moved for an award of prejudgment interest and attorney’s fees. The court ultimately awarded Mr. Canter $15,267.01 in prejudgment interest, $622.75 in costs, and $204,771 in attorney’s fees for work in obtaining the remand, for a total of $220,660.76, which was in addition to the Blue Cross’s $85,022 payment. Mr. Canter then filed a second motion for attorney’s fees, seeking compensation for the work his lawyer performed after the administrative remand. The district court conducted a second fee analysis wherein it considered only the work done after the remand. It then denied post-remand fees. Mr. Canter appealed that order before the Sixth Circuit. The court of appeals affirmed the district court’s post-remand order denying fees in this decision. Before discussing Mr. Canter’s arguments, the appeals court stressed that it reviews a district court’s grant or denial of a fee award for abuse of discretion and that, in general, it will “defer to a district court’s determination of a fee award, given ‘the district court’s superior understanding of the litigation and the desirability of avoiding frequent appellate review of what essentially are factual matters.’” With that being said, the Sixth Circuit could find no abuse of discretion or error in the district court’s decision. Mr. Canter first challenged the district court’s use of the Sixth Circuit’s five King factors: (1) the degree of the opposing party’s culpability or bad faith; (2) the opposing party’s ability to satisfy an award of attorney’s fees; (3) the deterrent effect of an award on other persons under similar circumstances; (4) whether the party requesting fees sought to confer a common benefit on all participants and beneficiaries of an ERISA plan or resolve significant legal questions regarding ERISA; and (5) the relative merits of the parties’ positions. The Sixth Circuit took no issue with the lower court’s application of these factors or its decision to undertake the King analysis in the first place. The appellate court found no issue with the district court’s division of Mr. Canter’s attorney’s work into the work that contributed to obtaining a remand and the post-remand work, or its decision to limit the scope of the fee analysis to the second category of work. As a practical matter, the district court adopted this analytical framework as a way of differentiating the second fee motion from the first. Since Mr. Canter’s two fee motions presented a clear division between the pre- and post-remand work, the Sixth Circuit concluded that it was entirely appropriate for the district court to separate them when conducting its analysis. The Sixth Circuit held, that “the court conducted a full and detailed King analysis that clearly outlined its reasons for distinguishing the post-remand work and declining to grant fees for that work.” Next, Mr. Canter argued that he was entitled to fees for litigating against Blue Cross to obtain his original fee award. Though the court of appeals acknowledged that “fees for fees” are certainly recoverable, it nevertheless emphasized that “the district court was not required to separate out fees for this kind of work from the overall post-remand litigation, which extended beyond Canter’s claim to fees for fees.” Thus, the court of appeals declined to disturb the district court’s “reasoned analysis as to the appropriateness of attorney’s fees for post-remand work in this case.” Finally, the court of appeals briefly went through alleged factual errors Mr. Canter argued were present in the district court’s decision, including its characterization of his post-remand work and its assessment of the success he achieved, and explained why in its view these arguments failed. Accordingly, the Sixth Circuit affirmed the district court’s post-remand fee decision.

ERISA Preemption

Ninth Circuit

Kenyon v. Reliance Standard Life Ins. Co., No. CV 25-11-BLG-TJC, 2025 WL 2029919 (D. Mont. Jul. 18, 2025) (Judge Timothy J. Cavan). Plaintiff Anthony P. Kenyon worked from 2004 until 2020 as a pipefitter for an employer in Montana. Through his employment Mr. Kenyon became a member of the United Steel Workers Local 11-443 union. As a union member Mr. Kenyon became a participant in a long-term disability insurance policy through Reliance Standard Life Insurance Company. By January 2020, Mr. Kenyon had to stop working due to recurrent pneumonia and infections caused by an immunodeficiency. Although it took a bit of back and forth, Reliance eventually approved Mr. Kenyon’s claim for coverage under the policy. Then in July 2020, Mr. Kenyon elected to roll a portion of his pension into an individual retirement account and took the balance as a lump sum payment. This litigation stems from Reliance’s decision to offset Mr. Kenyon’s disability benefit payments by the value of the lump sum pension payment. After unsuccessfully appealing Reliance’s determination, Mr. Kenyon brought this action against Reliance in state court in Montana. In his complaint Mr. Kenyon asserts state law claims for declaratory judgment, breach of contract, and violation of Montana’s Unfair Trade Practices Act. Reliance removed the action to federal court invoking federal question jurisdiction. Before the court were Reliance’s motion to dismiss and Mr. Kenyon’s motion to remand. Both motions turned on the issue of ERISA preemption. The court addressed the motion to remand first. As an initial matter, the court disagreed with Mr. Kenyon that the disability policy fell under the “safe harbor” exemption to ERISA. Rather, the court found that there was ample evidence that the steel workers union endorsed the plan for the purposes of the safe harbor regulation and established and maintained the plan to bring the plan within the scope of ERISA. The court noted, among other things, that the union was designated as the plan administrator, that it had the right to modify or terminate the plan, and that it had designated duties and responsibilities under the policy including issuing a certificate of insurance to each insured, maintaining records, and paying all premiums to Reliance when due under the policy. The court therefore determined that the policy is governed by ERISA. It then considered whether Mr. Kenyon’s claims are completely preempted by the federal statute, and found that they were. The court agreed with Reliance that each of the three state law causes of action could be brought as claims under ERISA, and that none of them were based on any independent legal duties. Instead, as alleged in the complaint, the claims arise from Reliance’s obligations under the policy, its actions handling Mr. Kenyon’s benefits, and its benefit calculation decision as a plan fiduciary to offset the benefit amount by the pension rollover payment. Accordingly, the court held that Reliance met its burden of showing that removal of the action was proper based on federal question jurisdiction. The court therefore denied the motion to remand. Finally, as each state law claim in the complaint was found to be completely preempted by ERISA Section 502(a), the court determined that the complaint was subject to dismissal under Rule 12(b)(6). The court thus granted Reliance’s motion to dismiss. However, it stated that it would grant Mr. Kenyon leave to file an amended complaint to amend to state a federal cause of action under ERISA.

Exhaustion of Administrative Remedies

Fourth Circuit

Young v. Western-Southern Agency, Inc., No. 2:23-cv-00764, 2025 WL 2080259 (S.D.W.V. Jul. 23, 2025) (Judge Thomas E. Johnston). Plaintiff Randy Young initially filed this lawsuit against defendant Western and Southern Life Insurance Company in state court in West Virginia. However, Western and Southern removed the case to federal court based on federal question jurisdiction. On September 20, 2024, the court determined that the Long-Term Incentive Retention plan at the center of the lawsuit is an ERISA-governed top-hat plan. Rather than dismiss Mr. Young’s action, the court permitted him to refile his complaint as an action under ERISA. Mr. Young did so. Western and Southern then filed a motion to dismiss the amended complaint. In support of its motion to dismiss, Western and Southern advanced three arguments: (1) Mr. Young’s claim for relief under ERISA is barred by his failure to exhaust administrative remedies; (2) his claim is also barred by his failure to timely file suit under the plan’s six-month deadline; and (3) Mr. Young is ineligible for the plan benefits because he was terminated for cause. In this decision the court agreed with defendant on all three points and therefore granted the motion to dismiss. First, the court stated that there was no dispute that Mr. Young failed to appeal his denial through the plan’s administrative channels. Mr. Young argued that exhausting the administrative remedies would have been futile because the same party who denied his claim would conduct the review. To this court, this “bare allegation” did not make a “clear and positive showing to warrant suspending the exhaustion requirement.” Thus, the court agreed with Western and Southern that Mr. Young’s complaint should be dismissed for failure to exhaust the internal administrative remedies. Second, the court held that the complaint should independently be dismissed for Mr. Young’s failure to timely file suit. The court noted that Mr. Young did not argue that the six-month period in the plan was unreasonable, nor did he provide an applicable statute of limitation that he believed would control. As the plan required that he file his action within six months of the final denial and because he did not commence his suit in that time, the court held that the action is time-barred. Finally, putting aside the issues of exhaustion and timeliness, the court determined that the uncontroverted evidence supports Western and Southern’s assertion that Mr. Young was ineligible for benefits under the plan because he was terminated for cause and Section 4.7 of the plan states that “[t]he contingent right of a participant or beneficiary to receive future payments hereunder with respect to both vested and nonvested performance units shall be forfeited . . . if the participant is involuntarily terminated from employment for cause by the company or any affiliate.” Mr. Young responded that the plan did not have the power to take away his vested and nonforfeitable benefits. However, the court held that ERISA’s strict vesting requirements do not apply to top-hat plans like the plan at issue. Thus, it said, “the funds do not rightfully belong to Plaintiff because they were forfeited under Section 4.7 of the LTIR plan, so unjust enrichment does not apply.” For these reasons, the court granted Western and Southern’s motion and dismissed the complaint.

Medical Benefit Claims

Second Circuit

Murphy Med. Associates, LLC v. Cigna Health and Life Ins. Co., No. 3:20-cv-1675 (VAB), 2025 WL 2022056 (D. Conn. Jul. 18, 2025) (Judge Victor A. Bolden). Plaintiffs Murphy Medical Associates, LLC, Diagnostic and Medical Specialists of Greenwich, LLC, North Stamford Medical Associates, LLC, Coastal Connecticut Medical Group, LLC, and Steven A.R. Murphy, M.D. are associated healthcare providers that operated COVID-19 testing sites. They have brought suit under ERISA and state law against Cigna Health and Life insurance Company and Connecticut General Life Insurance Company (collectively “Cigna or defendants”) to recover payment for COVID-19 testing and testing-related services that were denied reimbursement. Defendants countersued the providers for various claims related to alleged overpayments that they maintain plaintiffs collected. In previous orders the court granted in part and denied in part defendants’ motion to dismiss, and granted defendants’ motion for sanctions and precluded the plaintiffs from offering evidence in support of approximately 10,000 itemized claims. As a result of that last decision, plaintiffs were only permitted to introduce evidence to support the remaining 3,508 itemized claims. Plaintiffs moved for the court to reconsider its decision, but on September 20, 2024, the court declined to do so. Defendants subsequently moved for summary judgment on plaintiffs’ claims brought under ERISA, the Connecticut Unfair Trade Practices Act, and for tortious interference with beneficial or contractual relationships. In this decision the court granted in part and denied in part defendants’ motion for summary judgment. The court began with the ERISA claims. As an initial matter, the court agreed with defendants that in light of its order precluding plaintiffs from offering evidence as to the approximately 10,000 itemized claims, summary judgment in favor of Cigna was appropriate as to these claims. The court then focused on the remaining 3,508 itemized claims. It denied the motion to dismiss these ERISA claims. First, the court rejected defendants’ arguments challenging the validity of the assignments. It determined that the language of the assignment agreements could be interpreted to demonstrate the patients’ intent to assign any right to payment to the providers, and noted that courts in the District have found similar assignments sufficient to establish ERISA standing. Moreover, the court determined that plaintiffs’ representations to the patients that they would not seek payment from them insufficient to establish, as defendants argued, that the patients owed no debt to the providers for the medical services that could be recovered through their insurance. And while defendants argued that the assignment agreements only confer standing as to some of the providers, the court held that plaintiffs raised a genuine dispute of material fact as to the relationship between all of the providers, such that they could arguably be considered essentially a single healthcare provider. The court also declined to dismiss the ERISA claims for failure to exhaust administrative remedies owing to the fact defendants did not submit record evidence establishing that an administrative appeals process was available under the relevant plans for the itemized claims. Finally, the court concluded that dismissal of plaintiffs’ ERISA claims based on plaintiffs’ failure to post a cash price for the testing services was improper under the language of the CARES Act. For these reasons, the court denied defendants’ motion for summary judgment as to the itemized ERISA claims. However, the court granted summary judgment to Cigna on the two remaining state law causes of action. The court held that plaintiffs’ Connecticut Unfair Trade Practices Act failed because the Connecticut state legislature has not issued any statement that a violation of the COVID statutes, the FFCRA or the CARES Act, by a health plan is actionable under the Act. With regard to the tortious interference claim, the court agreed with defendants that plaintiffs presented no admissible evidence that Cigna made any defamatory statements about them. Accordingly, the motion to dismiss was granted in part and denied in part as explained above.

Sixth Circuit

Perrone v. BCBS Life Ins. Co., No. 1:24-cv-1313, 2025 WL 2027540 (W.D. Mich. Jul. 21, 2025) (Judge Hala Y. Jarbou). Plaintiff Jacob Perrone filed this action against Blue Cross Blue Shield of Michigan after the insurance company refused to cover the cost of his partial hospitalization program at an out-of-network residential mental health treatment facility during the months of March and April of 2021. Mr. Perrone asserts three causes of action in his complaint: (1) a claim for wrongful denial of benefits under Section 502(a)(1)(B); (2) a claim for equitable relief under Section 502(a)(3) based on an alleged violation of the Mental Health Parity and Addiction Equity Act; and (3) a state law claim for breach of contract. Blue Cross moved to dismiss the Parity Act violation and the breach of contract claims. The court in this order denied the motion to dismiss the claim under Section 502(a)(3), but granted the motion to dismiss the breach of contract claim. Blue Cross argued that the Parity Act violation must be dismissed because there is no private right of action available under the Mental Health Parity and Addiction Equity Act. The court, however, responded that this argument ignores the fact that Mr. Perrone explicitly invokes the Parity Act’s ERISA provision and the private right of action available to those denied plan benefits. As such, Blue Cross’s argument that Mr. Perrone lacks a remedial right to invoke the mental health parity requirement failed. The court did, however, agree with the insurer that the breach of contract claim was preempted by ERISA. The court determined that the claim self-evidently related to the benefit plan as it sought payment of benefits under the policy. As a consequence, the court found the state law breach of contract claim duplicative of ERISA’s enforcement mechanism for Mr. Perrone’s claim for recovery of benefits under the ERISA plan itself. The court therefore granted the motion to dismiss the breach of contract claim.

Pleading Issues & Procedure

Fourth Circuit

Konya v. Lockheed Martin Corp., No. 24-750-BAH, 2025 WL 2050997 (D. Md. Jul. 22, 2025) (Judge Brendan Abell Hurson). Plaintiffs in this putative class action are four retirees of defendant Lockheed Martin Corporation who allege that the defense contractor has violated ERISA in the transfer of their defined benefit pension benefits to a private and allegedly high-risk annuity with Athene Annuity & Life Assurance Company of New York through a process known as a pension risk transfer. Plaintiffs allege that the pension risk transfer was in violation of Lockheed’s statutory and fiduciary duties, and resulted in a prohibited transaction under ERISA. On March 28, 2025, the court issued an order denying Lockheed’s motion to dismiss the action. The court disagreed with defendant’s reading of the Supreme Court’s decision in Thole v. U.S. Bank, 590 U.S. 538 (2020), and their associated argument that plaintiffs do not have standing to bring suit because they have been paid all of their benefits to date. Instead, the court concluded that plaintiffs adequately alleged that Lockheed’s transfer of the plan assets and liabilities to Athene represented mismanagement so egregious that it substantially increases the risk that future pension benefits will go unpaid.  This lawsuit does not exist in a vacuum, however. Other large defined pension plans in the country have also annuitized some of their pension liabilities with Athene, and retirees affected by those transfers have brought similar lawsuits concerned by the risk of future harm. On the same day this district court issued its denial of defendant’s motion to dismiss, Judge Loren AliKhan of the United States District Court for the District of Columbia granted a motion to dismiss filed by corporate defendants in a case with facts similar to the present case in Camire v. Alcoa USA Corp., No. CV 24-1062 (LLA), 2025 WL 947526 (D.D.C. Mar. 28, 2025). (Your ERISA Watch reported on both decisions in our April 9, 2025 issue.) Before the court here was Lockheed’s motion for an interlocutory appeal to address this “burgeoning split” on whether challenges to pension risk transfers involving Athene are viable in light of Thole. In this decision the court granted defendant’s motion and stayed the case pending appeal, holding that Lockheed presented a controlling question of law about which there is a substantial basis for difference of opinion among the district courts and that an order from an immediate appeal may materially advance this litigation. As to the controlling question of law, the court held that its ultimate decision rendered was a legal one “namely whether those facts, if true, represent ‘mismanagement . . . so egregious that it substantially increased the risk that [Plaintiffs’ retirement plan] would fail and be unable to pay the participants’ future pension benefits.’” Moreover, the court added that “the question is controlling in the sense that if a higher court decided the question differently, the case would not move forward in its present form.” In addition to finding that a controlling question of law exists, the court also agreed with Lockheed that there is a substantial basis for a difference of opinion on the question to be presented for appellate review, as evidenced by the two divergent district court opinions issued on the same day. It is clear, the court said that the “courts themselves disagree as to what the law is.”‘ Finally, the court determined that resolving the issue related to the application of Thole to the allegations at hand has the potential to ease future litigation by simplifying the trial and making discovery less costly and more straightforward. Accordingly, some guidance by the court of appeals, the court found, will help avoid unnecessary litigation here. For these reasons, the court found that the requirements for an interlocutory appeal under 28 U.S.C. § 1292(b) were met on the question proposed by Lockheed “namely ‘whether Plaintiffs have plausibly alleged a sufficient injury for purposes of Article III’ under the unique scenario presented here.”  For those readers not familiar with interlocutory appeals under § 1292(b), the district court’s order does is a necessary but not sufficient basis for the appeal. The Fourth Circuit must now decide whether it wishes to hear the appeal and has pretty much unfettered discretion in doing so, even if it agrees with the district court that the § 1292(b) criteria are met. Full disclosure: attorneys at Kantor & Kantor represent that plaintiffs in Konya, along with attorneys from several other law firms.  

Sixth Circuit

Shakespeare v. MetLife Legal Plans, Inc., No. 2:25-cv-02250-TLP-atc, 2025 WL 2051113 (W.D. Tenn. Jul. 22, 2025) (Judge Thomas L. Parker). While she was employed at Prime Therapeutics LLC pro se plaintiff Tan Yvette Shakespeare participated in a prepaid legal services plan insured by MetLife, which she alleges by its terms promised legal representation for family law matters, including divorce. But when Ms. Shakespeare requested a counsel to represent her in her divorce, she maintains that MetLife provided an attorney who did not represent her in an appropriate professional manner before abruptly withdrawing from representation in the middle of the divorce proceeding. Ms. Shakespeare says that losing her counsel caused the state court to enter default judgment against her resulting in financial harm and loss of property. In January 2025, Ms. Shakespeare sued MetLife and Prime Therapeutics in state court in connection with this experience, asserting state law claims for breach of contract, bad faith, and negligence. Defendants removed the case to federal court and then moved to dismiss the complaint. The court referred the matter to Magistrate Judge Annie T. Christoff. Judge Christoff entered a report and recommendation on April 30th recommending that the court deny defendants’ motion to dismiss. MetLife timely objected. In this decision the court found no error in the report’s analysis and adopted it in full, overriding MetLife’s objection and denying defendants’ motion to dismiss. To begin, the court agreed with Judge Christoff that without more facts about the legal services plan and more evidence about Prime Therapeutics’ conduct related to it, the court could not find that Prime endorsed the plan as a matter of law. As a result, the court agreed with the Magistrate Judge that it is too early to decide whether the plan meets ERISA’s safe harbor exemption requirements, and by extension too soon to decide the ERISA preemption issue. The court thus denied the motion to dismiss based on ERISA preemption. Moreover, the court agreed with Judge Christoff that Ms. Shakespeare’s complaint alleges enough facts supporting each element of her breach of contract, negligence, and bad faith denial of insurance claims. Accordingly, the court overruled the objections levied by MetLife. Instead, it adopted the report and recommendation, and denied the motion to dismiss.

Kraft Heinz Food Co. v. Fritz, No. 3:24 CV 1822, 2025 WL 2062250 (N.D. Ohio Jul. 23, 2025) (Judge James R. Knepp II). Decedent Larry Leo Fritz, II initially designated his two children, James E. Fritz and Larry Leo Fritz, III, as the beneficiaries of his benefits plan maintained under a Kraft Heinz savings account. However, just four days before he was involuntarily admitted to a psychiatric unit and six weeks before his death, Mr. Fritz’s online account was used to change the beneficiary of the plan to name his mother, Rita A. Fritz, as the sole beneficiary. Rita was caring for her son during this period preceding his death. One month after their father died the Fritz siblings filed a lawsuit in Huron County Probate Court in Ohio against their grandmother, Rita, to invalidate the designation, claiming incapacity or undue influence. Approximately three months later, Kraft Heinz Food Company filed this interpleader action against Rita and the siblings to facilitate payment of benefits under the plan. The Fritz siblings moved to dismiss or stay proceedings in this action under the Colorado River doctrine, claiming that the Huron County probate case is a parallel state proceeding that would resolve the underlying issue in this dispute. Kraft opposed the motion and argued that the federal court has exclusive jurisdiction over the claims at issue. The court disagreed with Kraft’s jurisdiction arguments. The court observed that under ERISA state courts “have concurrent jurisdiction of actions’ brought by a beneficiary to recover benefits, enforce rights under the plan, or clarify rights to future benefits.” It added, “[t]he Huron County Probate action is one where the Fritz Siblings are acting as beneficiaries to recover benefits under the Kraft Plan. As such, state courts have concurrent jurisdiction over the issue and a Colorado River analysis is proper.” The court then conducted an inquiry to ascertain whether abstention was appropriate under Colorado River. It concluded that it was. The court determined that the interpleader action and Huron County Probate action are parallel proceedings involving the same underlying dispute to resolve the same issues. Since the actions are parallel, the court  proceeded to consider “(1) whether federal or state law provides the basis for decision of the case; (2) whether either court has assumed jurisdiction over any res or property; (3) whether the federal forum is less convenient to the parties; (4) avoidance of piecemeal litigation; and (5) the order in which jurisdiction was obtained.” As to the first factor, the court noted that ERISA does not contain any provisions regulating the problem of beneficiary designations that are forged or the result of undue influence, and that courts look to principles of state law for guidance on these issues. With regard to the second factor, the court stated that neither party indicates any court has taken jurisdiction over the property at issue. The court also found that adjudication of the Kraft plan in federal court would lead to piecemeal concurrent litigation over the same dispute in both state and federal court, which would be inconvenient and problematic. Therefore, the court determined that ongoing federal and state court proceedings are not more convenient here than just the state court proceedings. Finally, the court acknowledged that the state court action was brought before Kraft filed its complaint in federal court. Weighing all of this, the court found that the Colorado River factors favor abstention in this case. However, rather than dismiss the case, the court decided the best course of action would be to stay proceedings pending adjudication of the underlying issues in the Huron County Probate Court. The court therefore granted the siblings’ motion to stay.

Eighth Circuit

Su v. BCBSM, Inc., No. 24-99 (JRT/DLM), 2025 WL 2043663 (D. Minn. Jul. 21, 2025) (Judge John R. Tunheim). Defendant BCBSM, Inc. is a third-party administrator for several self-funded ERISA healthcare plans in Minnesota. BCBSM provides these plans with access to the Blue Cross provider network and its negotiated rates. It then administers employee claims for coverage and decides whether to approve or deny claims. If BCBSM approves a claim, it pays the negotiated amount to the provider from its own funds and then the healthcare plans reimburse it. Former Acting Secretary of Labor Julie A. Su initiated this action against BCBSM alleging that it is in violation of its fiduciary duties by charging the ERISA welfare plans for the tax that Minnesota imposes on providers’ gross revenues. BCBSM moved to dismiss the lawsuit for lack of standing and for failure to state a claim. On August 22, 2024, the court denied the motion to dismiss. It determined that the Secretary’s alleged loss in the amount of $67 million sufficient to assert standing. The court also concluded that the Secretary had plausibly alleged that BCBSM was acting as a functional fiduciary when it passed on the tax liabilities to the plans because it was exercising authority over the plan’s assets. “The Court reasoned that when BCBMS paid a claim, plan funds were automatically encumbered, meaning BCBMS was exercising control over plan assets and thus owed duties as a functional fiduciary.” In response, BCBSM moved for the court to certify its order for immediate appeal. Specifically, it moved to certify the question of whether fiduciary duties should be imposed when a third-party administrator uses its own funds rather than plan money and is subsequently reimbursed. Noting that a “motion for certification must be granted sparingly,” when the movant demonstrates “that the case is an exceptional one in which immediate appeal is warranted,” the court applied heavy scrutiny to BCBSM’s motion. It ultimately determined that while BCBSM posed a controlling question of law, one which may materially advance the ultimately termination of this litigation, it nevertheless failed to demonstrate a substantial ground for difference of opinion. In fact, the court held that the “the only potential basis for a substantial ground for difference of opinion lies in the speculation of the First Circuit.” That speculation came from a line in a decision out of the First Circuit hypothesizing that a third-party administrator could avoid fiduciary liability by adopting a reimbursement scheme similar to BCBSM here. However, as the district court here noted, “the First Circuit was not presented with the question before the Court, and it specifically described its holding as narrow…Ultimately, Massachusetts Laborers’ provides nothing more than pure conjecture about how the First Circuit may decide an issue with which it has yet to be presented.” As such, the court determined that BCBSM failed to demonstrate a substantial ground for difference of opinion on the relevant question. Accordingly, the court denied BCBSM’s motion for immediate interlocutory appeal.